Ok, it's finally done! I've posted pics of the process, and how I knitted it up (a pattern) below.
I knitted it up until the desired length.
A close-up of the cable (I used a needle top from my Boye Needlemaster set)
I bought dowels and used a handsaw to cut it to the right size. Then I used a pencil sharpener to sharpen the ends, and then I stained it a dark rosewood color.
Sewing it up together and put on a ribbon - tada!
Here's the back.
A top view so you can see the lining and the handles and the magnet buttons.
So here's how I did it - I took info from a KR thread and slightly tweaked it to my own makeshift specifications:
Materials: 1 ball of Lion Brand Wool-Ease Thick & Quick (80% Acrylic/20% Wool); 2 wooden dowels (each 6-7 inches long); hot glue; 1.5 yards of ribbon
Needles: #13 straights, cable needle
Cast on 34 stitches. (I used a super bulky weight yarn - but if you want to use worsted weight, cast on 48 sts, and do a total of 3 cables instead of 2.)
Row 1 - p2 (k2, p2, k8, p2), repeat between (parentheses) one more time for a total of 2 cables, ending with k2, p2.
Row 2 - k2 (p2, k2, p8, k2), repeat between (parentheses) one more time for a total of 2 cables, ending with p2, k2.
Alternate these two rows until you get the length desired. EXCEPT do a cable crossing (cross 4 sts; I've put in bold where to cross) every 10 rows - on rows 6, 16, 26, 36, etc. to desired length, and end bag with 5 rows after the last cable crossing, then bind off. (I did a total of 41 rows, and my bag is 9 inches wide and 6-ish inches tall) Fold it in half, sew up the side seams, leaving 2 inches or so at the top so you will be able to open the bag.
I put in a lining, magnet button closure, and weaved a ribbon around the bag and tied it in the front. I also sewed the dowels to the bag by passing my yarn needle through one stitch, around the dowel, and through the next stitch, all the way across. Then I glued each side of the dowel to the last stitch of either side so the stitches don't slide off the dowel.
Note: I used Lion Brand's Wool-Ease Thick & Quick because it was the cheapest super bulky yarn around. I think in the future, for any kind of bag/purse, I'd recommend a bulky yarn of a cotton blend instead.