I am pretty happy with the bag, and it was fun to do.
The bag was a cotton sweater so I could not felt it. After washing, disassembling and pressing the sweater, I made a template and cut out the pieces. To make the fabric easier to work with I fused the front and back to lining pieces cut from washed gray wool. The process was OK, but I think it would have been easier to fuse the two fabrics before using the pattern.
Before sewing the pieces together I "fake" serged the edges (I don't have a serger). I had to keep cleaning my needle because of accumulating goop from the fusing substance, but it wasn't too much trouble because I did not have many pieces to sew!
To finish the bag I added gray wool edging to the top, a strap, a button on the outside, and velcro inside to close the bag.
Note...fusing the sweater fabric to wool resulted in just the right stiffness for a purse. It is also strong! I am quite pleased with the result. I will have to try another bag...