Gone in a Twinkle of an Eye

I did manage to wear my Shopping Tunic--I loved it and got several compliments. But then, I tried to wash it. It was sogggyyy and was taking forever to dry, even though I tried to use towels to absorb as much water from it as I could. Well, I then got some well-intentioned "help" and--long story short--it ended up being partially felted in the dryer. So now I have this.


For reference, I laid it on top of one of my very fitted T-shirts. As you can see, the tunic is now way too small. It only took about 3 days to knit, so it wouldn't be hard to redo at some point, but I am bemoaning the loss of the yarn. Hubby suggested I let our daughter try it on, and it's kind of the right size, but it's too constrictive and stiff to wear as a top now. I thought about trying to see f I could still frog it at this point and then reknit it maybe as a purse or something that could then be felted further. Any thoughts?