You should google "water rocket parachute" for many ways to deploy a parachute. The "Tomy Timer" is perhaps the most common method but there are several others. The design posted by
Insomniac is sometimes called an "air brake" deployed 'chute.
The problem I've never been able to come up with a good solution for is getting the round to be small enough to fit in a spudgun barrel. I thought that perhaps a sabot and a long rod, which will also act to stabilize the round in flight kind of like a bottle rocket, would be the way to go. Here is my air brake
idea from a couple years ago, never tested it though.
Another possibility (stolen from water rockets) is to just put the 'chute in a nose cone that simply sits on top of the rest of the round. If you can get the round to slide backwards at apogee, air drag (or the 'chute trying to expand) will pull/push the nose off. The nose is connected to the 'chute with a string and drag on the nose deploys the chute. See for example
http://hometown.aol.com/waterrocketguy/ezd.html
Another possibility, is omit the 'chute and design the rocket so that when falling it flies horizontally. The high drag makes it fall slowly. There are two designs that I know of that do this. One uses a long tube mounted on the rockets nose with a ping pong ball resting on the end of the tube. The PP is attached to the rocket with a long string. On ascent air drag keeps the PP on the nose and the rocket is aerodynamically stable. At apogee the PP falls off but is retained by the string a foot or two away from the rocket body. The PP trashes the aerodynamic stability of the rocket and it falls with the rocket body horizontal.
The second method uses a very long pointy rocket body, called a "backslider" or "Barroman Body". The long skinny shape gives very curios aerodynamics. At high velocities it flies nose first. At low velocities it flies sideways. So, to apogee it flies fast and stable in the normal "rocket" orientation. After apogee it falls with the body parallel to the ground and very slowly. See
http://hometown.aol.com/waterrocketguy/backslider.html
The advantage of the Backslider and PP designs is that you get a very aerodynamic (low drag) rocket shape that maximizes the altitude the rocket will reach. The falling velocity might be greater than with a big 'chute but you might be able to offset the greater fall rate with a higher apogee.
A 'chute shell that worked well would be really cool. Keeps us posted on how it goes. (Attach a photoflash board hacked to fire repetitively and fire the round at night

)