This is how I do it.
http://tallgrassprairiestudio.blogsp...-tutorial.html
You do not sew the top of the hanging sleeve into the binding - you sew it about 1 to 1.5 inches below it. Yes, it's a tiny bit more work, but worth it so the sleeve doesn't show.
The "D" shape of the sleeve is so the quilt will hang flat. If you sew a flat binding, the quilt will curve with the dowel.