Oh Noes! Your favorite knit sweater, shrunken by the forces of heat and water combined! Never you mind, as you can still wrap its loving arms around you with the cunning aid of RECYCLING!

Ok, so this tutorial describes how to turn a regular unshrunk wool sweater into a nifty backpack with some purposeful alterations, but the same principle can be used to reappropriate your tiny knits.

You're going to need:

An industrial zipper. You can pick these up in some fabric supply stores, you might also consider going to a car upholstery shop (as I did) and finding out where they get their zippers.
A 100% wool sweater. I found two for three bucks each at the local Salvation Army.
A washing machine. You're going to need to tumble this in the washing machine on hot, with a little dish detergent added to get it to felt. Some tutorials I've read recommended putting it inside of a pillow case to prevent fuzz from clogging up your washer.
A sewing machine with thread to match or accent your sweater.

Step 1: Sew Up the Ends.

To begin, I sewed up the neck and bottom of the sweater while it was inside out, then I inverted it through one of the sleeves. This left me with a nice clean seam on the top and bottom.

Step 2: Shrinkamaroo

Next I hucked the sweater into a washing machine set on hot. I added a little dish detergent to the mix to help the fiber felt.

Here are some links to instructables about felting:
https://www.instructables.com/id/felt--beads-TUtorial/?ALLSTEPS
https://www.instructables.com/id/Felted-Bag/?ALLSTEPS
https://www.instructables.com/id/Felted-Recycled-Beverage-Coozie/?ALLSTEPS

Be sure to turn off the washing machine before it gets to the spin cycle or your sweater will develop permanent creases. Now put it in the drier set on medium, and let it dry.

Step 3: Shaping It Into a Backpack

Fold the arms down to the waist. It's starting to look like a backpack, now. For the sweater size I had, there was no need to extend the arms, but if your arm loops look especially tiny, you should extend them with a little bit of nylon webbing or cloth for a comfy fit. In my case, I just sewed the ends of the sleeves to the bottom of the sweater.

Step 4: Plan Out the Opening

I spent a good amount of time deciding how I wanted this to look. It was important that the whole thing looked more like a backpack than a sweater. I decided I wanted the neck facing down, with a "U" shaped opening in the top. I made a mistake in planning this out, thinking that the material wouldn't stretch while I was sewing on my zipper. You'll see it a bit better in my next step.

Step 5: Squirrel Nut Zippers

Plan the slit for your zipper to be about 20% shorter than the zipper itself. The felt will be kind of stretchy, and will slide along as you stitch the zipper to the opening. This means that if your opening and zipper are the same length to begin with, the hole will be a few inches longer at the end. I just patched the problem up with a little bit of cloth.

Step 6: Bind the Zipper End and Admire

Pass a few loops of thick string around the end of your zipper to keep it from sliding out of its track. Now you're finished. Take your new backpack out to the fire truck and admire your handiwork. Good job!