This one isn't about putting five story ideas in front of you and randomly picking. That is my strategy once PiBoIdMo is over and it's time to write! ; )
This is about the games kids play. Kids come up with a game for everything. Even the simple act of choosing who is "it" has about 25 different little rhyme games to accomplish the task. Thinking about how to make life more fun, is a great way to generate picture book ideas, I think. Is there a way to make the mundane more kid-friendly?
When I'm in front of a group of kids, I'm always looking for ways to make life a little more playful. For example, when I was teaching (Sunday school) and times popped up when some kids were finished with a project or reading and were just sitting there waiting for the others, I would give them something to do. Sometimes it was making silly faces at me (this was mainly for my own amusement). Sometimes it was hopping on one foot. Sometimes it was trying to pat their heads while rubbing their bellies. While this often had the effect of distracting the kids who were trying to finish (and is therefore not terribly practical in a real school setting), it always served to up the fun factor. And isn't that what a lot of picture books are trying to do?