I collapse the 3.5 wearing a leitz hood and stuff it is a beaten up lowpro, it is a tight fit, you need a big camera shop with a patient salesperson. You can omit or include a push on cap.
Zing makes a neoprene (wetsuit material) utility case that has loops on the back for carrying it on your belt. It'll easily fit a Leica III with collapsed lens since it fits my M3 with collapsed Elmar. Fits snug to the body and still provides a bit of protection due to the rubbery neoprene. Found mine in a better camera store - haven't seen it in any regular electronics places that carry digital point & shoot type cases.
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