Layer 2 was plain applique. I pressed the freezer paper pattern to the back and clipped and pressed the seams using the paper as a guide. Then I removed the paper and appliqued the wheel to the ground. I stitched a line of split stitch using Flower Thread around the wheel/gear.
The next layer is a box shape. I prepared the fabric the same way as layer 2, removed the paper, but I added a piece of medium-weigh pellon to the lower section of the box to add a bit of dimension. To define the box shape, I stitched a row of split stitch in red and an area of black stitches, outlined in split stitch and then filled with open rows of Bukhara couching.
Layer 4. It's pinned on here and I've begun to applique it. I also pressed this layer over freezer paper but this time I'm leaving the paper in as I stitch. It adds a lot of body to this layer. I plan to outline stitch along the edges that overlap the box--perhaps in red. In the original image, the box was very red. Most of it will be covered by subsequent layers, but I don't want to lose that bit of red.
You can see my border stitches here--most of the red that shows now will be covered by the layers or the frame.