I'm hosting the July loom-a-long on the Ravelry boards and you can still join us. We're knitting up the Loom Rib-It washcloth. Using a simple ribbing technique, you can have a 9x11" washcloth after a day or night of knitting.
Ribbing technique on the long loom
Or you can knit longer to make a hand/kitchen towel. If you haven't yet learned how to knit on long looms (also called knitting boards), this is a nice introduction.
Knit with worsted yarn for an airy cloth
All you need is at least a partial skein of cotton yarn (worsted to bulky weight) and the green Knifty Knitter long loom (54 pegs, large gauge). The Loom Knitting Primer by Isela Phelps is a good reference but not required.
If you're not a member of Ravelry but you'd still like to give this pattern a go, you can download it for free from my blog. Let's loom knit!