In spite of the mistake you did a great job of putting it together! After all that time I'm almost reluctant to suggest this but there is a great paper pieced flag here. It is designed to be a tea cosy but if you could downsize the templates it could be used for a mug rug... I made the tea cosy for my sister for christmas and it turned out great.
http://lilysquilts.blogspot.ca/search?q=tea+cosy