This is, without doubt, the best part of the entire process. I love it. I reeeeally love this part.
Now that we have our 'story seed', we go about brainstorming. I grab a stack of paper (just junk paper, since this is a rough and messy stage). This is the part where, no matter what, you NEVER limit yourself. Ever. Be as stupid as possible. Any idea, no matter how irrelevant or pointless, gets jotted down. Anything. Even if it has remotely no tangible connection to the story at hand, everything matters. There's a reason.
The minute you start thinking too much is the minute you're screwed, because limiting yourself for any reason at this point means you're going to have a boring, predictable result. I know you want to make the bestest story possible, but don't go thinking that there's only one solution to make this story a masterpiece. Don't think too much. Just do it.
Remember what Douglas Adams taught us: "DON'T PANIC".
Okay, there is something I'd like to point out; I tend to be more wild and carefree with personal stories than I am with client work or studio tests. My clients tend to have a more solid idea of what they want, usually scripted, but never so concrete that I can not add any ideas of my own. But the crazed brainstorming is still there, and is in fact essential; I can think of a couple of times when I needed to storyboard something 'nice' but couldn't stop thinking about screwy ideas. The solution: jot them down anyway. It's important to push an idea as far as possible, because you can always backtrack to the point where it works. Seriously, I can't stress this enough, do what that rotten dormouse said, and FREE YOUR HEAD.
Another thing I'll point out is that my intent with this story is mainly humor and action, but even if you're doing 'serious' storyboarding (drama, advertising, spaghetti westerns, etc) I would still go ahead and jot down every random thought. Just because you're not making funny-stuff doesn't mean that you can't explore bizarre thoughts...hey, it might just work!
[And even if you're doing a studio test for a funny show/movie that doesn't completely match your own sense of humor (but in the end you still want to match the content of the work you're applying for), still jot those thoughts for now. You can always backtrack later.]
So we start scribbling down thoughts in a stream-of-conscious way (for client work, when scripts are given to me I will mark down 'beats' with strokes/slashes to point out timing marks, then thumbnail in the sidelines), putting down whatever comes to mind. A good deal of this stuff will never be used, but do it anyway. You'll come up with a lot.
In these rough pages I juggled ideas, namely whether I wanted Scapula to break IN to the prison or break OUT. As you can see in one of the pages I toyed with ideas for both, and eventually decided that breaking IN had more opportunities for fun storytelling, while breaking OUT was mostly Scap running around and being chased by guards.
When a story starts to form I begin thumbnailing. There's still nothing very solid yet, so there will be a lot of crossing this out and adding that in (see for yourself). A cohesive flow will start to form and from there I have, more or less, the 'spine' of the story, which means I have something of a path I can follow now (even if there will be a lot of changes made). If you can see your story starting to form from these thumbnails, that's great. If nothing is happening, that's also great, because you get to go back and brainstorm some more.
SPONTANEITY and IMPROVISATION are key here. Get loose. Explore.
Chug some caffeine and have fun...I really, really, really love this part of the process.