Back when I used an outer frame pack I'd lash it onto the top or bottom of the pack horizontally. It would catch on brush and get wet when it rained. (It's a good idea to use a waterproof stuffsack in this situation.) Now I have an internal frame pack, and the sleeping bag packs inside where it's protected.

If you can't get it to fit inside, there are a few things you can try: 1) Use a pack liner and don't bother with a stuffsack for the sleeping bag; insted, put it loosely on bottom and put the rest of the gear on top. The gear will compress the bag a little and the bag will fill some of the empty spaces. 2) You can put the sleeping bag in a compression stuffsack. This will compact it as much as it can, and it should fit. You wouldn't want to keep it compressed like this longer than you have to, though, otherwise the bag will lose some of its fluff & get cold.

Hope this helps.