Gauge
7 stitches = 1 inch in stockinette stitch
Finished Size
Locket: 1 inch wide x 1 1/2 inches high
Necklace: Variable length
Ring: Variable size
Top of ring: 7/8 inch in diameter
The Locket
With US #4 double pointed needles, cast on 14 stitches, leaving a tail at least 8 inches long. Join for working in the round, being careful to not twist the stitches.
Knit 9 rounds.
Here's a little tip for avoiding "ladders" when you knit the first stitch of each needle:
When you knit the first stitch, the needle you're using (indicated here by a pink arrow) should rest ON TOP of the previous needle. Like this...
Here's a picture of what NOT to do. The working needle is UNDER the previous needle - not as neat...
After knitting 9 rounds, purl 1 round.
Knit 1 round.
Next round: P1, bind off 5 purlwise, p1, bind off 5 purlwise.
You should have 2 live stitches on each side of the locket.

Put the 2 stitches from the middle of the round on hold with a scrap of yarn.

Put the 2 other stitches onto two needles (1 stitch each) and knit the next stitch.
You're now set up to knit a 2 stitch I-cord. (If you need help, check out our I-cord Tutorial.) Make the I-cord however long you want the necklace to be. Just make sure that it will be able to fit over your head! My I-cord is 23 inches long.

Slip the 2 stitches from the scrap yarn to a needle. Then, making sure the I-cord isn't twisted, attach it to the locket using a 3 needle bind off.
To do this, hold the 2 needles parallel and use a third needle to knit the first stitch from the front needle together with the first stitch of the back needle.
Do that again with the second stitches. There should now be 2 stitches on 1 needle. Pass the first stitch over the second, just like a normal bind off, so that 1 stitch remains. Cut a tail, pull it through the final stitch, and weave it into the inside of the locket.
Now sew the bottom seam together, using the tail from the cast on. Sew under the stitch right below the cast on edge.
Do the same on the other side of the seam. This is just like sewing shoulders together, sewing one stitch on one side and then the corresponding stitch on the other side.
After sewing across the whole bottom, bring the tail into the inside of the locket and weave it in. The final result should look something like this:
The next step is to wrap thread around the base of the I-cord. You can skip this step if you want, but I think it adds a nice contrast of color and texture.
First cut a fairly long piece of thread and sew it through the bottom stitches of the I-cord.
Wrap the thread around the base of the I-cord. Be sure to wrap around the tail of the thread so that it is secured.
When you've wrapped as much as you want, thread a regular sewing needle and push it through the center of the wrapped section.
Trim the tails very short, and, if you wish, continue with another color.
Do the same to the other side of the I-cord.

The Treasure
Using thread and a size A crochet hook, leave a 12 inch tail and chain 6. Slip stitch into the 1st chain to form a ring.
Round 1: Chain 1, single crochet 15 into the ring, slip stitch into the 1st chain.

Change colors for Round 2 if you want.
Round 2: Chain 1, single crochet into same stitch, *chain 3, skip 1 single crochet, single crochet into next stitch, repeat from* to end of round, chain 3, slip stitch in 1st chain.

Change colors again if you want.
Round 3: Chain 1, *6 single crochet into 3 chain loop, repeat from * to end of round, slip stitch into 1st chain. Fasten off and weave in all ends except the first center one.

Bring the tail up through the center hole to the front of the flower. Thread the bead onto the tail, and thread the tail onto a regular sewing needle.

Insert the needle into the inner ring directly across from where the tail originates. Bring the needle out a few stitches over, directly under an "empty" single crochet.

From behind the flower, insert the crochet hook through the single crochet that is above the tail, and bring a loop of thread to the back of the flower.
With your fingers, bring the tail through the 3 chain loop to the back of the flower. Now use the tail to chain approximately 18 (depending on what size finger you want to fit).
With your fingers, bring the tail from the back of the flower to the front, through the 3 chain loop directly across from where the chain originates. Insert the hook (from the back of the flower to the front) through the "empty" single crochet there. Grab the tail and loop it through to the back of the flower. Slip stitch and fasten off.
Sew in the tail and you've got a treasure!

It fits right into the locket, safe and sound!