There is another tool with the meshwarp tool that is also great
for shaping a flat surface to simulate cloth.

Create a new image, bucket fill with color.
Using the warpbrush setting indicated, go around the edges
of the image pulling it away from the edge.

Create a new layer. Using the airbrush set on low opacity,
paint black where your valleys will be. Try to relate it to the edges you have
to look the way cloth might if slightly rumpled. Change blend mode to overlay.

Create another new layer and use white paint to highlight the hills. Lower the opacity
in the layers palette and change blend mode to overlay. Adjust as needed.

Merge visible.