Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Effect

The performer has two cards placed into the pack by a volunteer. He claims as his magical skills are not the best so he is going to enlist the help of the world's smallest magician. He claims he is going to make the magician out of less than one balloon. He uses the balloon to turn his hand into an impromptu puppet. After a couple of gags with the puppet, the puppet is told to find the cards. To make it 'harder' the puppet is blindfolded with a 160 blindfold.
The cards are placed in the puppets 'mouth'. The puppet throws the pack on the table/ in the air and is left holding the 2 selected cards.

Apparatus

Pack of cards, 2 extra cards (Optional), white 260 (or scrap), 160 (pref black).

Method

This is the simplest method. (Alternative methods for magicians or for presentations with a borrowed deck are suggested below.).
The duplicates of the cards are on the top and the bottom of the deck. The actual cards are in the deck somewhere. the performer casually hunts through the deck and picks out the two cards. He gets a volunteer to remember them and slide them anywhere into the deck. The deck is placed to one side for the moment.
A lock twist is made from the white 260 and tied, the rest of the balloon is broken off and discarded (figure 1).
Eyes are drawn on the lock twist and it is slipped over the middle finger to give the hand 'eyes'.Note that the knot is on the bottom so it's hidden underneath the fingers.The fingers are held close together to represent the top of the mouth/bill. The thumb represents the lower jaw(figure 2).
The performer then goes into a bit of by-play with the puppet. (Vent/non-vent whichever you're comfortable with).
It is announced that the puppet will find the hidden cards and to make it harder he will be blindfolded.
The blind-fold is made from an opaque 160. The puppet 'helps' to make the blindfold (figure 3). The blindfold is made thus 3 inch bubble, a pinch twist, a loop back to the pinch twist (big enough to slip over 'eyes'), break off the rest after leaving another 3 inch bubble.
The blindfold is slipped over the puppets eyes (figure 4).
The cards are placed in the puppets mouth(figure 5). By keeping a tight grip on the cards as you throw them towards the table (or up in the air) the hand/puppet will retain the top and the bottom card. Taa Daa.

Alternative Methods

With duplicates.
Magicians: Force the duplicate cards.
Without duplicate cards (borrowed/standard deck).
Magicians: Have the cards selected and control them to the top and bottom of the deck.
Non-magicians: Have the 8 of clubs and 9 of spades on the top and the bottom. Remove the 9 of clubs and 8 of spades . Show them briefly without comment then let the volunteer return them to the pack. They will assume they are the same cards at the finish.

Performance

Before performing this effect you should work out and learn at least a rough script of what you are going to say. I'm not going to write down exactly what I, myself, say as my style won't suit all but just give a general idea of how it plays and some ideas for lines and jokes.
After the cards are selected you can make a big deal over how you're going to make a magician balloon out of less than a single balloon. How you accomplish this will cause amusement. Give the puppet a name and get everyone to say hello to him. You can make a funny remark, here, about people talking to your hand.
Since the puppet is so simple, because most of it is your hand, creating the illusion of character in it will be resting largely on your puppetry skills, patter and imagination. For the rest of the routine you will need to make the decision whether you want to give the puppet a voice.
Vent: If your doing a vent routine it's a good idea to have a sharp script. Let the puppet get the better of you with smart remarks.It's often very funny to have the puppet keep interrupting you as you try to explain what is going to happen with the trick. Some good jokes along the way are:
When the puppet is blindfolded have him panic and ask "Who turned the lights out?".
When the cards are put in his 'mouth' ask him a question and have him say "hmmm mmm mmm". Take the cards out to let him answer and when he starts getting cheeky again shove them back in to shut him up.
Non-vent: Make sure you give the puppet real character. When working with kids I find the easiest character to have fun with is a naughty, mischievous puppet. Here are some fun moves:
Have him repeatedly look away while you are talking to him and bark his name to regain his attention.
Practice double-takes.
Have him be particularly fond of a particular member of the audience.
Have him bother you by tugging on your clothes or picking up random things off the table. When you grab them off him and replace them, he immediately steals them back.
Have him panic or go to sleep when blindfold is placed on him.
When putting the cards in his mouth have him keep putting the pack back on the table.
When the trick is finished make him take exaggerated bows to stage left and right.

Bonus gags and routines

Card from the air. Control the selected card to the top. Under the guise of the puppet holding the cards for you palm off the top card (so it is hidden in the 'roof of puppets mouth'). Throw cards in the air and have the puppet apparently catch your cards from the flutter.

Card from change bag. Have a card selected and put into change bag. Have the rest of the cards put in seemingly on top of there card, but in reality in the other compartment. Let them mix the cards about in the bag as much as they want. Flip back to other compartment and let puppet take out card.(Blindfold gag can be used again plus you don't even have to know which card is selected yourself.)

Streamer/silk production. A Thumb tip can be used for the puppet to produce coils, streamers or silks. Either use TT in other hand or use on thumb on puppet hand. The TT is loaded as the puppet positions your other hand for 'his trick'. A fun gag here is to have the puppet get annoyed because you won't hold your other hand correctly. I pop a thumb up while the puppet 'looks away' the puppet notices and bends it back into position. I smirk as I'm playing a joke on the puppet, when he notices he gets angry. I curl my upper fingers to represent a curled lip.

Tongue gag: Cut a pink/red 646 in half and roll up. Hide in puppet hand and let it roll out at the appropriate moment as a tongue. The puppet can lick your face (eeugh) by pretending to push the puppet away with the fingers of your other hand but in reality the thumb holds the 646 flush to your cheek and is pulled through to reproduce a licking effect.

Wand gag: Puppet hits you over the head with a wand you take it off him and place under your arm, he repeatedly steals it and bonks you on the head with it.

Well that's about it, have fun folks.