I apologize for the lack of process pictures. This was done at a whim. It took about 30 minutes, and when I looked at it, I thought, "I should have done a tutorial on it." Oh well. Let me tell you how it happened.
Kewpie loves nightgowns. I scaled one down for her way back here, and it's gotten too small for her. My mom donated a nightgown she had that she'd never worn.
I used the same method as I have in the t-shirt dress. That is, lay a shirt that fits, with the sleeves tucked in, on top of the nightgown with the shoulders matched together.
Trace the armholes and sides of the pattern t-shirt onto the nightgown until a few inches below the armholes.
Cut out what you've traced, angling out from the tracing until you've reached the edge of the nightgown.
Sew the sides back together.
To make a hem, I measured how long Kewpie wanted it to be, and cut the nightgown off a few inches above that. Then I used the original hem as a ruffle. I hate hemming knits, so I use the original hem as much as I can.
I was going to make sleeves the same as I did in the t-shirt dress, but then I remembered that this is a summer nightgown, and Kewpie gets hot easily. So I took the hem of the original sleeves and used them to make a ruffle around the armhole.