Here's a close-up view of my edging, (row 3 just completed, right side of work facing) for anyone who is having difficulty. The "cast on 2 using backwards loop, cast off 2 on next row" should be forming little bumps along the side, or "winglets" as Ann is calling them.
Just before the first marker there should be a vertical ladder of eyelets, commonly called "faggoting".
Yarn overs should slant from right to left. Here is a link to a video showing correct formation of YOs. Scroll to the bottom of the page and click on the little video camera icon. Pink is for Continental knitters, blue for English style knitters.
In this photo the first stitch is the one remaining on the right hand needle after completing the "cast off 2 sts". The second stitch is a YO. The third is the completed double decrease. Fourth is another YO. 2 knit stitches and then a k2tog.
For anyone who is interested in my bead placement; I use a crochet hook to place a bead on the third stitch of row 2 of the edging, and then I purl the stitch. This centers the bead in the diamond that forms along the edging. If you are using the graph, mark a "B" for bead placement in the row directly below the double decrease. Of course I have a corresponding bead on the other end of the row too.