Here is a recipe for homemade, natural, play dough from The Green Guide. I've never been inclined to make our own, since I always found that even just cleaning up the commercial stuff was enough home fun for me. But this recipe actually looks quite easy and it might be fun to make it along with your child.
1 cup flour
1 cup warm water
2 teaspoons cream of tarter
1 teaspoon oil
1/4 cup salt
food coloring
Mix all ingredients (add food coloring last). Stir over medium heat until smooth. Remove from pan, let cool slightly, and knead until blended and smooth.
Add a splash of vanilla extract or peppermint extract to help keep mold away.
Here are more play dough recipes, including one for Oatmeal Clay, from Creative Kids at Home.
http://www.thegreenguide.com/blog/diy_diva/967
http://www.greendaily.com/