Here is the outcome...
coordinating fabric (pillow back)
cut your coordinating material to the size of your pillow insert. (my pillow insert was 20 x 20) i cut my pillow back to 20 x 20. fold the top edge over 1.5 inches. pin. sew. creating a finished edge.
match the fabric edges of your dishtowel and pillow back (right sides together). you should have three sides touching. pin. sew the three edges. leave the top open(top of dish towel with loop and finished edge of pillow back.
fold over the side edges of the dishtowel (the part that you didn't sew). sew along both sides. This should leave you with sides that are the same width.
turn your pillowcase right side out. iron.
lay pillowcase dishtowel side down, flip top with tab over. mark the button spot in between the loop in the dishtowel.
sew button in place. insert pillow insert. slip loop over button.