Believe it or not this dress was only a half a yard of fabric and cost me about $2. Sometimes Buying pre-smocked fabric is the way to go.
I simply shortened the smocking by cutting out the middle strip of fabric (approx 6 inches plus 1 inch of the smocking) the piece that I cut out ended up being the sleeves. I think I might add a couple of straps just to finish it off. I can never tell what might work until she wears it.
One of these days I will actually take pictures as I am sewing but since I do my sewing in the middle of the night it rarely happens.