I had two problems doing this...a weird ridge started to form along one side after I started my decreases. Also, the number of stitches didn't work out at the end- I didn't end up with 4 on my needle. So then I couldn't figure out how to finish and bind-off. I thought I was doing it right and it seems to be an easy pattern so...any thoughts? Maybe I was doing my YO wrong?
Can you describe how you did the yarn overs? Or, look at the video on this page to see if you were doing the yarn overs correctly. That would be my first guess, and if you can figure that part out we may be able to see better what the problem is.
Just looking at the pattern again....on the decrease half of the cloth, you are only decreasing one stitch per row (there are two decreases [K2tog's] and one increase [yo] per row so that balances out to one decrease total per row) so you should eventually end up with 4 stitches if you keep going. That tells me that you may be doing your yarn overs incorrectly, some how.