Finally finished my marketbag pattern. It is an adaptation of the one on the Lion Brand website.
Cast on 30 sts using a single strand of Peaches & Creme cotton on the cone with a size 9 24"circular needle using a temporary cast on. Knit in garter stitch, slipping the 1st stitch in each row until you have 30 slipped stitches along the sides. Pick up 30 stitches along the left edge of the work. Remove the temporary cast on and pick up the 29 stitches that are left along with an extra stitch in between to equal 30 stitches. Pick up 30 stitches along the other edge and join with a marker for the beginning of the round. You should have 120 stitches on your needle. Knit 3 rounds. Switch to a 24" 10 1/2 circular needle to work in pattern:
1. YO, K 2 tog around.
3. SSK, YO around.
Repeat these 4 pattern rounds until the bag is as deep as you like. Mine measured approx 16" from the top of the garter stitch bottom.
End on round 4, placing markers every 30 stitches to mark the corners of the bottom.
Next round: Knit 2 stitches together firmly to the next marker, leaving 15 stitches in that section; Knit in pattern for next 30 stitches; Knit 2 tog to the next marker; Knit in pattern for next 30 stitches.
Next round: Cast off next 15 stitches using applied 4 stitch I-cord (a good demo can be found here): Knit next 30 sts in pattern; Cast off next 15 stitches using applied 4 stitch I-cord; Knit next 30 in pattern. (Note: You will have an extra knit row on each pattern section because you are switching from knitting in the round to knitting back and forth while casting off the other stitches. It is not noticeable when the bag is finished.)
Work back and forth in pattern on 30 stitches for about 4 inches, then purl 2 together across and cast off your stitches using applied 4 st I-cord. Pick up the stitches on the other side beginning with a purl row and work in pattern to match the other side. Cast off using 4 st applied I-cord. Pick up stitches at the end of the first cast off section and work up the side of the bag in 4 stitch applied I-cord, continuing in plain I-cord past the edge for a long loop that will be one of the handles. Continue with applied I-cord down the other side. Repeat this on the other half of the bag.