Not sure what type of cloth are you talking about, but JurassicPerk also had a cool trick on creating the cloth-wrapped around the handle. Quoted from his post on the hard surface challenge;
It's funny, because I'm the MrOneTwo - epic fail on my behalf XD Anyway, back on topic - I use Blender and was able to set up a similar system with the handle rotating and moving. I was even able to replicate the vertices following the rotation of the grip. However what I do not understand is how the cloth stays aloft up…