Our Relay has midnight madness games every year for the teams to compete in.  Some of the games have been the water balloon toss you suggested, along with the following:  rubber chicken run; three-legged race; sack race; egg run; obstacle course; musical beach balls and a couple of others.  If you'd like more info on any of these, feel free to email me at smendenhall@hscpa.com since I don't check this site on a regular basis.

Good luck!