Take a look at these ADORABLE knitted tea cup pin cushions. I plan to make a bunch.
They recommend using used wool sweaters that you felt but I think I will knit blocks of what I need to make them instead.
The designer of these has a blog and mentions that she will have a book coming out this year on how to make 30 projects. I can’t WAIT to buy the book!!
http://www.marthastewart.com/page.jhtml?type=content&id=stv4070083&layout=martha