Look into whether or not you can have a bounce house at a park. You may need to have a permit (liability issues), so you will need to factor that into the cost. You can easily "get around" the non-guest issue by giving all of the party kids a wrist band and having an adult monitor who comes and goes.
My son is turning 5 this year and we are having the party at our house. There are only 10 kids in his Pre-K class, so it's not really cost effective to have it at a party place. Here's what we're doing:
1. Small bounce house (3 or 4 kids at a time); my sister has one, so this isn't costing us anything
2. Classic party games (pin the tail, relay races, musical chairs, Lego car building/racing, bean bag toss, etc)
3. We have a swing set, so that will be "open"
4. Deli trays from our local grocery store (chicken tenders, sandwiches, chips, fruit, macaroni salad, birthday cake and ice cream)
5. Goodie bags (Lego "mini" sets $2 at Target and a chocolate bar)
Last year we did a party place and it was great, but pricey. We had a newborn, so it was worth it. Plus he had 20 children between the two preschool classes, so it was also more cost effective.
Get creative and check on the permits! At that age 2 hours is great and if you aren't paying "per person", you can feed the parents too!