Here's the phone cozy. I probably could've felted it a bit more, but it fits my phone just right as is. I sewed a snap onto the i-cord so I can attach it to the purse.
I used it today, and I'm very pleased with it. Of course, the purse hasn't yet had the chance to accumulate all the crap that purses seem to accumulate, plus nobody called me today, so I don't know for sure how well my diving-phone solution will work.
Oh, and in case any of you want to attempt your own cozy: CO 30. Knit 26 rows in stockinette stitch. BO 27 stitches. Put last 3 stitches onto dbl point needle and work i-cord for about 3 inches. BO. Fold rectangle in half and seam botton and side. Weave in ends. Felt. Sew snap onto end of i-cord and top edge of cozy, right near i-cord base.