When you craft an item, there should be input slots that accept any item. In these slots, you could place various items dropped from monsters, or other items. If you found a good combination, it'd create a more powerful item, but if you didn't, you could get a less good item, or a piece of scrap. As an example, you could make a Generic Energy Blaster with a Generic Fire-y Item in the any item slot to get a Generic Fire Energy Blaster. A jelly blob or something nonsensical would result in a crap item, or a piece of scrap metal. If you put..say, a Generic Prism in there, you could get a spread gun. Certain items might add a chance of failure, but make a more powerful item. EDIT: You could also place items in already-built items to enhance them. This could carry on to ammo, such as grenades or rockets, that would be made with a casing, explosive, and whatever else you wanted. For instance, you could put a Generic Slimy Thing in a grenade, and have a slime grenade that would coat the ground in slime, to glue enemies to the floor or make them slip.