After some experimenting, I created what I call the "drawstring" cast on. This cast on is created by anchoring the working yarn and then wrapping it completely around the loom once. The working yarn is then held across the top of the peg on the first or odd peg while the bottom strand of yarn is flat knitted OVER the working yarn. On the next peg or even peg, the the working yarn is laid across the peg, but the bottom strand of yarn is hooked UNDER the working yarn and lifted over the peg. To complete the cast on, continue lifting the bottom strands of yarn OVER the working yarn & peg on all the odd pegs, and UNDER the working yarn & over the peg on all the even pegs, until the last peg in the row has been reached. The beginning yarn tail forms a drawstring which can be cinched to completely close the bottom. This drawstring cast on would be good when making loom knitted toys or flowers.
The egg was made on the Knifty Knitter flower loom and completed by flat knitting 16 rows and doing a gathered bind off, leaving the top open so the egg can be inserted. Detailed instructions for this Easter egg can be accessed here, or in the pattern box on the right.