The dollhouse quality of this 350-square-foot guest house--transformed from a derelict garden shed--on Washington's rural Bainbridge Island captures the attention at once. Though small, it makes a big impression, thanks to the clever incorporation of a two-story element that echoes the slant-walled shapes of the area's old water towers. Actually, there was once a water tower on the site. The architect's simple but ingenious idea was to turn the tank platform into a real tower, with a small room on the ground floor and a cozy loft accessible by a ladder. The rest of the structure contains a sitting area, a bedroom, and a bathroom.