In 'How to make your own lightweight camping and hiking gear, by Vick Hines, there are patterns for a poncho/tent (plus many other goodies)...with a poncho used as tarp even for ground camping, you want them longer than for ideal use as a poncho, on the one I made I left the extra material in back (useful for covering pack in rain) and use vertical pull cords along bottom 30" to bring the back up to a workable height when just walking...also have waist cords to form more of a 'jacket' when it's windy/rainy, also velcro at neck for wearing poncho as a cape (left folded in half) when wind/rain are right (at back/sides and not too blustery)... ventilation when used as cape is MUCH better than with either a full poncho or rain suit, one of the reasons I like the poncho instead of a suit -- almost always wear it as a cape, if it gets too rainy I usually stop and set up camp anyway.
Using poncho as tarp necessitates the umbrella or other supplemental light rain protection, as Ed says there's only so long you can sit quietly under a tarp in the rain, nature calls notwithstanding. At 102" length the poncho has to sit diagonally and very close to the hammock in windy rain, though my hammock is only slightly over 8 feet long to tie-outs (at 5'10" a little close but light). To be honest if I'm expecting hard rain I usually set up on the ground, more loafing space when stuck under cover for many hours.
There's nothing so nice as an extra tarp for living space, and a place to lean back, when you're stuck in the rain. A hammock can be hung w/ one end vertical-ish to use as a sling chair for reading, but this is of little use in the rain since hard to cover effectively.
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