1. To create your caterpillar's eyes, cut out two large yellow cardstock ovals (approximately 3" x 1.5"), then cut out two green ovals that are just slightly smaller. Use hot glue to attach the green ovals atop the yellow ones, and affix the eyes to the red lantern. To create the nose, cut out a small half-circle of green cardstock and glue it to the head.
2. For the antennae, fold each pipe cleaner in half and twist the ends together, and then kink the ends slightly. Use hot glue to attach the antennae just inside the top opening of the red lantern.
3. Cut seven lengths of clear fishing line for hanging. Tie one to each lantern. Hang the head first, using tape or a tack to attach it to the ceiling, and then hang the green lanterns in alternating shades behind it. To create the appearance of movement, adjust the length of the line for each one so they're not all at the exact same height.