Peter,
A cape forms the hood by folding a flat piece of fabric and holding it in place with some kind of fastener. For a coated nylon cape, I prefer to line the hood area to keep the clammy nylon off my face. It makes sense to also put the storage bag at the crown of the “hood”.
To get a feel for this, take any large piece of fabric like your tarp, locate the center of one of the long edges, layit over your head, pinch points over your shoulders and about 6 inches from the hem and pull the bunched fabric forward and together at your throat. That’s about it. You will notice that the two points are 28 to 30 inches apart (and as I said, 6 inches in from the hem). If you put a tab at one of those points on the outside of the tarp and one on the inside and add matching velcro or a button and buttonhole, you’ve got a cape. You can line the hood or not. If you use a hat, you can just throw it back and avoid having the clammy thing around your face.
The only other thing you might possibly want to do is put velcro tabs on the hems of the back corners — if they hang too low. With the size of your tarp, you probably won’t have to do that – at least when wearing a pack. That’s with the 8.5×5 or 9×5 foot capes I have made. I like the shorter tarp, despite my height (over 6′), because I mostly use a hammock that works better with a tarp of moderate length. And I can use even an 8×5 tarp on the ground using a pyramid setup.







