I've seen a bunch of t-shirt yarn projects on Pinterest, maybe you can find some ideas there.
That good ole song of Wa-hoo-wah, we'll sing it o'er and o'er!
It cheers our hearts and warms our blood to hear them shout and roar.
We come from old Vir-gin-i-a, where all is bright and gay.
Let's all join hands and give a yell for Dear Old UVa! Virginia is for [knitting] L vers.
OTN:Alexandria Cardigan, Sisterhood baby blanket OTH: Bernat Mystery CAL Afghan FO: Audrey In Unst
I haven't tried it, but I saw the concept demonstrated on one of the Knitting Daily TV dvd series!
It was really cool!
I've also seen a lady who was knitting various shapes of bowls, using yarn she'd created out of strips of plastic grocery bags! All colors...the tan ones, the white ones, all with different ink for the writing! I met her while waiting for my husband at the doctor office. She uses these 'bowls' for things like magazines, or newspapers. The bowl she was working on was a wide, shallow bowl. I was so impressed with her creativity!
The most time-consuming thing was cutting the bags into workable strips, then tying them together end-to-end. But once that chore is done...the knitting is a breeze! I think it's a PERFECT WAY TO RECYCLE these plastic bags!