Don't do homophones. That is not explicitly in the year 2 curriculum. It is year 3. They will not have a clue unless they are extremely switched on. Though saying that, if you do decide to do it there is a great video about homophone monkey on youtube. I do think it will go over all but the highers heads to be honest with you though.
If you want to do something really challenging but in keeping with the year 2 curriculum then try exclamation sentences. You could do the story of little red riding hood and sentences such as, "What big teeth you have!" "How hairy you are!" etc... They must start with what or how, contain a verb and end with an !
OR you could do something about imperative verbs (bossy verbs) and do something instructional. Where you come up with imperative verbs and get the kids to direct each other using these words to build/draw/make something. Keeps it practical. Gets the imperatives in, and is fun. For the highers you could challenge them to use adverbs to describe the verb.
Hope that helps!