I forgot to post about the other set of yarn that I got from the yarn lady when I was in Chemainus last month. I got a double knit wool/nylon blend in four colours, six balls of each colour.
This time I decided to knit a blanket on the loom. I held two strands of yarn together, cast on 15 on my trusty straight loom, and knit until the balls were done - about 32 rows. The squares (rectangles) are nice and thick and have lovely texture.
Here's the layout that I'm thinking of. I have a variegated yarn that will compliment this palette, so I will crochet around each rectangle, and then make a thick border to beef up the size. Hopefully I'll finish it and deliver it back to Handmade Hugs this weekend!