Wash and dry it, then make the whole body part into a bag- just sew the bottom closed and then hem the top. Use some of the arms to make a strap.... felt it first so you know what you are working with. Darn the holes before felting. You could then add a flower pin to make it cute- just make one from one of those fancy flowers they sell in the craft section of Wal-mart/craft stores... for the cost of the flower pin you would have a cool bag! Or if you could crochet a quick trim around the top and crocket a flower to decorate...
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