How about jello worms?
This looks like it might be a good fit for your party.
http://www.fabulousfoods.com/recipes/article/111/18070

Jolly Ranchers work really well....you just have to be careful that you don't melt them too fast or they will burn and that stuff does not come off easily. Start with making a simple sugar and then add the jolly ranchers once that mixture gets around the 200 degree range. They are good to go once the temperature reaches 300. At this point they can be poured into non-plastic molds.
Have fun and be careful!

Yes, crushing and dissolving might work together. Crush finely first, then stick it in whatever liquid you are heating for making the jello and see if that does the trick.

what about crushing the candy (finely) first and then making a paste of it with a little water?

Japanseccury- I was just thinking that you might be able to disolve rather then melt. Try disolving candy in a small amount of simmering water then reducing the water by simmering until to syrup consistancy. good luck!

Not sure if it can be done, never tried. Keep in mind hard candy was once liqiud. Do some research on making hard candy and flavoring hard candy. My guess is if you can get to melt to liquid it will harden again once cool since it's already been brought to hard crack or hard ball stage. (can't remember which)