Barbie from WA was interested in how to make these felted stitch markers. This is what I do, but don't felt so much that I could say this is the best way so, excuse me if I'm not doing this the easiest possible way available.
First I make a tiny yarn ball. I want the markers to end up quite hard with as little felting time as possible, that is the reason why it is yarn ball in the beginning. Also this brings me back to my childhood, time before I could knit, I was fascinated in yarn balls... Plus little bonus is that you can get rid of at least some of your stash.
The yarn is covered with wool with the help of the felting needle.
After needle felting it is soap and water and hard work. With hard work I mean that you have to use little pressure to make the wool tight and also pressure when rinsing out all the soap in the end. (I have tried to use a washing machine, but the little balls don't come out hard enough to my taste.)
When the little felted ball is clean and dry attach the cord to it. I crochet cotton because I think cotton can take more wear.
And then you can embroider if you wish. With whatever yarn you have available.
There you have it.
Instead of the crocheted cord you could maybe use some metal rings from the hobby shops and sew them on but I prefer the yarn. I think you probably could make anything with yarn and fabric which brings me in my Inspiring Women List to number two: Shelley Thornton, a dollmaker. She says somewhere on her web pages that she wants to use cloth and thread as a medium as much as possible... instead of painting she embroiders etc.
Then again. These stitch markers should be knitted. Right?
I was taught by Vivian to make these small knitted balls. Think about the possibilities: lace or colorwork, or tiny tiny cables. It is endless really, there is no limit.