Rhythm with Basketball- love this idea! It would also be a great activity if you ever want to do a joint lesson with your gym teacher (we often do that during the end of the year when I get temporarily kicked out of my classroom during SOL testing).
My 3-5's did this with tennis balls and K-2 with scarves. Whole notes with scarves were a full circle with one arm going overhead, and half notes were passing around the body. Quarter notes we passed the scarf from hand-to-hand in front, and for Eighths we waved the scarf up and down. Great activity!