I bought this case at Borders store. It's an Ex-Point Anthracite eReader Sleeve for Kobo which I use for the Kindle 3. It sticks out just a tiny bit at the top, but it's perfect otherwise. The clasp is magnetic. I keep the case in the front pocket of my backpack and slide it out to read when I'm traveling. The main reason I didn't get a book-type cover is because I wanted to be able to read it one-handed on public transportation.
https://www.ex-point.net/?page_id=41&shopp_pid=38