It sounds like a small towel to me. Maybe you should consider finishing this piece for a towel. I've decided that knitted towels are a good idea too so I guess I just might make some. I'm going to either finish the blanket rib cloth I've got going or frog and start the basket rib pattern that's tormenting you.
I personally prefer white yarn for these types of things. I've been known to bleach the color out of my hand knitted squarish pieces.
PS Thank you. I really don't recall the last time someone called me clever.