If you follow the patterns that usually show up in the manuals, the interior space and mosquitos can be a problem.  Instead of the regular layout, pitch the short end of the poncho as the length of the tent (on an appx. 55" x 88" poncho).  Add mosquito netting to the short ends of the poncho (55" side), which is rolled up and tied when not in use.  Below are pictures of the result.  Very simple conversion, it took about 2 1/2 hours to add the netting.  The whole thing should be under $25, a lot less if you can get a cheaper poncho.

Poncho set up; it has a very low profile.  The cable in the front has a piece of bungee cord, pull it tight between two tie-offs or use stakes instead of trees.  When you stake it to the ground it will naturally take its shape.

Netting attached to arm sides.  All parachute cords and netting is permanently attached so it can't be lost.

The front is a triangle roughly 26" on a side.  In rough weather you can snap the top two snaps and it closes down to a small opening and does not decrease interior space by much.  The front triangle is sewed to one side and velcroed to the other side so it can be opened.

The back is just pitched straight out depending on what the weather looks like.  The back piece of netting is sewed all the way across.  A string is tied around the head of the poncho to keep it shut and then tied to a sapling to keep the middle from sagging.

The interior has a large amount of space, the plastic groundsheet is about five feet square.  Yes, you may need to sleep slightly on the diagonal, or keep your knees slightly bent, but you aren't cramped.  It was used on a camping trip by two people and we weren't camped for space.  If the weather is good and no bugs are out, you can prop up one end for good air flow.  Substitute the black plastic with clear plastic for a solar still.

This is a sleeping pack cut down to 20" by 40" (head to hips cushioning) with the poncho/plastic sheeting rolled up inside gives a package about 5" in diameter and less than 2 1/2 pounds.