I apologize - these 'progress' photos did not turn out well, and I didn't realize it until after the sewing/photo process. I was sewing/photographing at night (while the kids were sleeping, of course), but I now know I'll have to do photos in the natural light. Oh well, next time.
Anyway, this was a dark blue embroidered shirt with a funky floral band on the bottom. It wasn't a great shirt, but it had potential for an excellent refashion. The best part was that the sides of the shirt had an open slit on both sides, which would look cool as ankle flare on little girl pants.
This is how I did it:
Turn the shirt inside out and using an existing pair of pants, trace the outline of the pants, making sure the outside ankle lines up with the slits.
Cut out the pant legs (leave the existing hem). Sew pant legs together. (I admit... I've been known to sew the legs together when sewing too late at night...lol...). Turn the top hem down and stitch.
To make the drawstrings: I love that this shirt has matching 'edges' on the collar and sleeves. Cut out these edges on the collar and sleeves as close to the stitch as possible. Or, if you are more of a perfectionist (I'm not), you can un-stitch and re-sew. Take the strings (the 'edges' now removed from the shirt) and thread through the waist hem (note: you may have to un-pick a stitch or two so the drawstring will fit though the naval opening).
Finally, turn the pants right-side out and tie a nice bow. Congrats on the drawstring pants - very funky!