Paul Hickson at our neighboring University of British Columbia
has built Liquid Mirror Telescopes (LMTs) for cosmological
survey and other purposes. If you are interested in tese devices
his web page http://www.astro.ubc.ca/LMT/what.html will be of
some interest.
A physics problem of some interest for your brighter students:
What is the upper size limit on optical LMTs on Earth's surface?
Warning, this question is slightly subtle, though well formed.