Recently I've stumbled upon this shots my wife took back then while I was working at it, and decided to post them. There is not enough stuff for a step-by-step, but everything is very simple and I'll try to explain the missing steps. Feel free to ask if you need help making something similar.
The main frame of the cage is made of a thick plastic covered iron wire (about 5mm around a 1.5mm core).
Thin iron wire (I used 0.5mm) is used for joints.
Duct tape also helped there.
Hot glue gun fixed everything.
Long stripes of assorted fabrics, 1cm wide.
Vinavil (thick glue)
Light bulb, bulb holder, electric wire (mine comes from Ikea).
Birds, flowers and feathers at will.
Look at the frame in the pictures, there are 4 horizontal circles of different sizes. Three are simple circles, just cut them, close them with thin wire and secure with duct tape. Top circle includes an hook to hold the cage to the electric wire: simply make another circle at 90°, pass the cable though it and use a straight piece of iron wire to hold it.
Make four identical pieces for the vertical bars of the cage, give them the shape of the cage. Leave some extra wire to be closed around top and bottom circle, fix the two middle circles with thin wire.
Now cover everything in fabric: start from joints, apply some hot glue, and attach the beginning of a fabric piece using a tweezer or something (don't use your fingers! I tried and got burnt) then wind it for the length of the wire up to next joint, having about 2mm overlap. Fix with hot glue keeping the fabric tight, you don't want it to get loose! Then change fabric and repeat until all the cage is covered in colorful patterns.
Mix thick glue and water and pass it all over the fabric using a paintbrush; be sure to choose a suitable glue!
Leave it dry, then with the glue gun apply decorations. One suggestion: don't fill it too much!
The harder thing to find were the birds: my wife managed to find them as surplus easter decorations.
I hope someone will find this useful!