Guapo's Sweater

I'm working on a doggie sweater for my friend Judy's tiny little Yorkie named Guapo. She requested orange--I found the yarn at Michael's. I have been trying to follow the "Bone-i-fied Dog Sweater" from my book "Chicks with Sticks." I've had to modify it a lot though since he is so tiny. I want the length of the sweater to be about 10 inches when done. Here are my notes (but I don't recommend using them as instructions to make your own doggie sweater until I figure out the kinks...):

Collar:

Cast on 32.

K1 P1 rib for 5 rows.

Switch to Stockinette Stitch (K1 row, P1 row) for 2 more rows.

Body:
Make1 at beginning and end of row.

Continue knitting in St st, repeating M1 at beginning and end of row every 4th row 4 more times.

Knit in St st for 22 more rows.

Bind off 9 st at beginning of next 2 rows.

Knit in St st for 2 more rows.

Decrease 1 stitch (K2together) at beginning and end of next row and every other row 4 times.

Knit in St st until desired length.

I have gotten this far, and now am stuck!! There is nowhere for the legs to come out up by the collar. It actually looks like the sweater was knit backwards because the two "wings" are near the bottom of the body of the sweater instead of up near the collar. I really think I followed the pattern correctly so I don't know what happened! I am wondering if I can just knit a rib at the end here and make that the collar of the sweater. Otherwise I may have to start all over...