I've made a bucket lantern for the halloween week of the amusement park I work for. I will show you how it's done.
If you don't get the idea of the result, here's the video!
Step 1: Materials
First of all the list of materials:
-A steel bucket
-A marker of any kind
-A disc grinder
Step 2: Marking the Scary Face
Use your imagination!
Make sure you use straight lines, this is easiest to cut. I'ts no problem if you correct things (see the left eye), but if you use a permanent marker, make sure the outer lines are the ones to cut.
Step 3: Cutting
If you cut the shapes, be very careful, the cutter is a dangerous piece of equipment if you don't handle it properly. Always use protective gear to keep those eyes and ears working properly. Don't use gloves, just keep your fingers out of the way.
Don't cut to deep, it's not a problem if the shapes don't fall out immediately. Use a screwdriver and some gloves to remove them after cutting.
Step 4: Finishing Touch
Now you do the finishing touches.
Use a file or some sanding paper to smoothen the rough edges.
You can also paint the inside. Add a candle or lightbulb to create a nice effect at night. Be careful with fire, the bucket can get quite hot when using candles or big lightbulbs.