1 quart plastic bags make a good emergency water container - the kit could go in this if scouts are going to be careful, otherwise it could be double-bagged or folded up.
folding razor blade (available at county comm for cheap) might be a good blade alternative. I have some concern about the blade folding up, but it's very compact, inexpensive, and better than a bare razor blade. My first choice would be a locking blade, like the spyderco ladybug.
Small saw - I always use the standard wire saw, but there is a folding saw similar to the folding razor blade. If you want to buy in bulk for many kits, the manufacturer is the Derma-Safe company.
LED light - good for signaling, OK for route finding. Also available inexpensively at CountyComm.
+1 on the hot spark or similar sparker.
Possibly a few feet of surveyor's tape? It would run counter to standard "lost" protocol (stay put) to use this as a trail marker, but it could be used for signaling - tie at head-height on a tree or make a small flag to wave. If someone is looking for you, either would make you more visible, especially if you fall asleep during the night.
Small card with survival tips/positive mental attitude stuff.
Sounds like a great project, keep us updated on the results!