If only this were possible with pens and pencils: Crayola has released a machine called the Crayon Maker, which melts down the nubs of old crayons to combine and re-mold them into new ones (as long as you ain't picky about the mashed-up color).
It's like the Play-Doh Fun Factory except it's actually productive! I dug the PDFF as a kid, but while that device taught you how to make a star-shaped extrusion, that production method is largely worthless unless you're planning on becoming a churro-maker.
Check out the Crayon recycling goodness here.