The trick was working with the lining panels first, then adding the fronts.
There was no instruction about adding flannel pieces to take the needles, so I didn't. I notice that at least one finish for this item posted to Pinterest has flannel inserted. I figure it would disrupt the "magic" flow, and needles (unlike pins in a pincushion) will go in and out of the silk. If this doesn't prove the case I will add a piece of flannel.
I have tried inserting a little video to show how the 'magic' works. Not sure how successful this will be, as I can't test it until the blog is published! If it doesn't work, and you don't know how the magic works, try watching this commercial clip.
This is not the most perfect of finishes, but it works and fits the style of the Toy Chest. I do like the 'magic' effect of flipping the covers back and forth.