Dora from Show Tell Share shows how she refashioned a button down shirt into a peasant blouse. She removed the button placket from the bottom portion of the shirt, but kept it at (and the collar) at the top. A little bit of gathering under the button placket keeps it all aligned and gives a little extra ease. You can keep it plain, or you can add decorative stitching. (Great way to make use of those fancy stitches on your machine!) Get the tutorial.
[photo from Show Tell Share]