I've handled the fabric a good many times, trying to figure out how to mastermind the transformation, but walked away again and again. The problems had to do with the existing shape of the fabric and the odd sizing, since a cape features more fabric in the front panel than the rear panel, minus the v-neck. The other trick was to figure out how to work with the boxy pattern. It met the trim diagonally/crooked so I couldn't use the bottom of the cape as the top of the purse.
Tonight, I figured it out, though not without some unforeseen tassel issues and seam-ripping. I made it as large as the fabric allowed (17" across and 20" tall) with a couple of pockets inside and a magnet closure. I'm pleased with the bag, and I sure hope she likes it! I even named it.Next project: a t-shirt quilt for my husband. Once that's done, I'm on to making art-quilt wall hangings and some scoodies, which I learned about from a Thread Heads video on YouTube, via the ThreadBanger website (http://www.threadbanger.com/). Please check it out--you'll be amazed at, and grateful for, the DIY power they wield!