Write a script that aids refactoring C programs by extracting subroutines from fragments of C code.
Do not reinvent the wheel: wherever possible, use existing technology for the parsing and comprehension of C code. Look at projects such as sparse and Coccinelle.
Your script should work as a filter that puts the free variables at the top, encloses the rest in curly braces, does something helpful with break, continue, and return statements.
That's just a start.
This project is tagged "hard" because it's not clearly specified. The first step (like with many projects) is to work out the specification in more detail.