The original blouse had long sleeves, a collar in the same fabric, ruffles on either side of the front placket, and a single ruffle trimming each sleeve hem.
(love that colour, no? glorious! - the winter sunshine doesn't hurt, either)
So I removed the placket-ruffles first. Then I removed the fold-down collar by using my seam ripper to open the top of the collar's band. I took in the sides a little (just a little), and shortened the sleeves (just cut them off).
I used some sari fabric my aunt gave me (it has three different patterns in it, I just used two so that I wouldn't have to cut right through the middle to get at the third pattern) for my trims.
I made a little tube of fabric and pleated it. I stitched down the pleats and then hand-stitched it over the button-placket, only tacking it on one side where the buttons were (so that I could still get at the buttons, yeah?).
I took another strip and pleated it and tucked it into the collar band, and hand sewed the band shut, so that I had a ruffled stand-up collar.
Last but not least, I used the ruffles from the sides of the placket to trim the new sleeve hems. I hand stitched another band of sari fabric over the seam, pleating it as I went.