Unfortunately, the stone doesn't grant wishes by their meaning, but rather by what was stated.
So, when Sarah (Jon) said I wish Karyn was all clean clothes, the wish was granted, literally.
Karyn looked down and saw that she was in a little pink party dress, just like Sarah's and her mommy's. But then she realized (as much as her young girl's mind could) that she wasn't wearing the dress. She was becoming the dress. And after a few seconds, she was the dress.
Sarah looked around, confused. "Where Karyn go?"
