The ruffle starts after picking up the stitches.
I was wondering if the bind off was for ease of blocking the rectangle --- ??
Bind off (130 sts).
Do not cut yarn.
Pick up 130 sts across the bind off row.
Knit 3 rows with color A, purl 4 rows with color B.
Next row -- with color C *k2, YO* repeat * across row.
Knit 1 row.
Next row *k1, YO* repeat* across row.