Here are the Bird House Bags that I have just finished. You can find the free pattern at www.elann.com in their free pattern section or click on the title of this post to go there.
On the second one on the left with the red top, I decided to decrease the top of the body of the bag by doing two k2tog on the last two rows. This gave it a slight decrease at the top body of the bag which allowed the top of the bag to seat nicely.
Lastly, I needle felted all of the little flowers to the sides of the bag.
Now, go and knit you up a little Bird House Bag!