We could have people donate old sheets. Take the bland colors and cut long rectangles, take the bright colors and cut shapes (shields and stars and triangles, etc.) and glue/sew it all together. Add some metalic trim! Viola! Tack it to the sanctuary walls; and maybe sew some stones on the bottoms in the back or something to keep it from flowing out to crazily.
For a royal party! (Or a medieval fest!)...The girls could wear these, and the boys could wear a king's crown or knight's (faux) headgear... Make them plain and then decorate at the party! ...But do this before age 5 or 6 - children any older than that will probably no longer be interested in this theme!