i think i figured out how to make this, it doesn't really look anything like the bag i linked to, but then i'm not actually doing that exact stitch. I am now doing round after round of *yo, k2tog* and am getting a tidy looking result. i have 1 thread separating the 'holes', (like on that one row that was a mistake on the previous version, so i now know what i'd done wrong there, i'd missed one knit row). the previous pattern would make for a sturdier bag, but this one is much easier to keep track of, and to see if there have been any mistakes. i think i may have an uneven number of stitches, which means i have no visible line where i go to the next round, i am always yo and then ktog having the yo of the previous row on the left, and the stitch on the right.
I took some photos showing what the pattern looks like and how i knit it but i must have left my camera cable at work :-( hopefully i will find it there tomorrow morning and i can then upload them, in case anybody is interested!