I really like knitting socks toe up, but I also wanted to try for a better fit by adding a gusset, and I wanted to knit it with magic loop instead of double points. I searched and searched and didn't find a pattern that had what I was looking for. So I examined heels and gussets in several different patterns and of course my gauge was different, and this is what I came up with.
I knit from both ends of the yarn, which is why the stripes progress in opposite directions.
Gauge: 6.25 st/in
Needle size: 4
Yarn: Indulgence 6 Ply Distrato (at 426 yards, it looks like I have enough for another pair)
Use a cast on appropriate for magic loop knitting, such as this
Cast on 16 stitches per sock (8 each for the top and bottom). If you want a wider toe, cast on more to start.
Row 1: K1, M1, knit to last stitch, M1, K1; K1, M1, knit to last stitch, M1, K1
Row 2: K around
Continue increasing until there are 48 stitches per sock. (or more for a wider sock)
Knit around until you have 6 inches or about 2/3 of the total foot length. This can be adjusted depending on how big of a gusset you want. On this sock I did 3 rounds of increasing for the gusset, if you want more start that many rows earlier.
The first half of the sock is the top.
Row 1: Knit across the top. K1, M1, knit to last stitch, M1,
K1 (2 stitches increased)
Row 2: K around
Repeat until you have the desired number of gusset increases.
How wide or narrow the heel is can be adjusted by how many stitches are in the middle of the heel. This gives a fairly wide heel.
Row1: K 23, M1, K1, wrap and turn
Row2: P18, M1, P1, W&T
Row3: K16, M1, K1, W&T
Row4: P14, M1, P1, W&T
Row5: K12, M1, K1, W&T
Row6: P10, M1, P1, W&T
Row7: K8, M1, K1, W&T
Row8: P6, M1, P1, W&T
Knit around picking up and K2TOG the wraps as you go. (Pick up the wrap, put it on the left needle, and knit it together with the stitch it was wrapped around)
K till 8 stitches left, SSK, turn
Sl 1, P20, P2TOG
Sl 1, K20, SSK
Continue decreasing until you are back to 48 stitches per sock (so 24 on the heel side).
Knit around until a little less (1 1/4 inches) than desired length
Switch to K2, P2 rib for 1 1/4 inches.
Use a stretchy bind off such as a K2TOG (through the back loop to make it look like a regular bind off) bind off http://www.knittingdaily.com/blogs/daily/archive/2008/07/30/a-stretchier-bind-off.aspx or Jenny's surprisingly stretchy bind offhttp://knitty.com/ISSUEfall09/FEATjssbo.php.