First you cut out two pieces that look like this :
You can have a yolk on both sides or just one, but you always need two pieces of the dark green felt.
Next get some batting for the inside. Cut two pieces each smaller then the actual piece of felt. you need one shaped like the circle and the other shaped like the dark green felt.
Put the batting under the small circle and sew around it. I used a blanket stitch but you can do it however you want.
Put batting between the two large felt pieces and then sew around the edge leaving a small open space.
Braid 3/4 of an inch of string or rope and tie it around the key chain hoop. Put the braided piece in the hole and then sew the open hole shut.
Now you're done.