I finished quilting the rag:
I liked the texture I got with this experiment; the plastic-icky feel fabric paint gives to material was altered by the grid stitches. It feels a bit like snake skin now. Here's a detail shot of the hand stitching, which didn't turn out quite as horrible as I thought it was while I was doing it:
I liked the effect on the back, too.
Now to make it into something usable/useful.