The makers of Sugru, a “soft-touch silicone rubber that moulds and sets permanently”, have laid out detailed directions on Instructables on how to make a digital camera bouncy, nearly indestructible and ready for use by small children, calling it the “Awesome Bouncy Kids Camera”.
Once your think you are all done and have left your final walls to cure for 24 hours (this time is necessary for an aggressive use hack such as this) it is worth checking that you camera is fully protected before handing it over to the child. Check that there would be enough Sugru walls to protect the camera by pushing it into a table surface from every possible angle. If you are fully confident that your camera is covered then start doing drop tests beginning from a small height, I would recommend starting at 10 cm, and working your way up. Remember it is better to be safe than sorry so if in any doubt, build more walls.
Sugru looks like a great way to modify or repair just about anything, not just cameras for children.