In last year's Vacation Magic:
"Fourth of July Poolside Blow-out. The good old days of Fourth of July parades, games, and prizes return to Disney's Old Key West Resort this holiday. The event is kicked off with the famous "pargo parade," where Cast Members decorate their pargo carts as parade floats! Held poolside at the main pool, Disney's Old Key West Resort will treat Guests to contests, carnival games, and prizes. Be sure to check for a special character appearance in Community Hall! The fun begins around noon on July 4, and generally lasts until about 5:00 p.m. For more information, check with Hank's Rent 'N Return or the Front Desk upon check-in."
We were there last year. The "special character appearance" was Goofy and the lines were long to get in to see him. They were also either giving free popcorn or cotton candy or slush - LOL..great memory I have! The pool was pretty crowded - we found one seat for the 7 of us, just to hold our towels and bags. I think that a lot of people had the same idea that we had, to avoid the parks and just hang out at the resort for the day. We did end up eating at the Cape May Cafe for dinner and strolling into Epcot for the fireworks. It was crowded, but really not all that bad considering what I had expected.