Since I've had requests, here's the pattern from memory. If someone tries it, please let me know if it's not correct.
Worsted weight yarn (I used Cotton Ease in pumpkin and Kitchen Cotton in dark green) The kitchen cotton isn't as soft, but it never touches the baby's skin since it's on the foldup edge of the hat.
Size 6 needles
Should make a hat to fit a 1-3 lb baby - it's about 10" across. You could easily adjust the size by casting on more (in a multiple of three) and working a longer hat body.
Using the dark green, cast on 183 stitches - do not join
Row 1 - K1 BO2 across - this creates the lacy ruffle
Row 2 - K across
Row 3 - change to the orange and knit across
Row 4 - K1 P1 across
Repeat row 4 for 2" - 3" depending on how much rib you'd like on the hat. Keeping in mind it will be folded in half when you're finished.
You'll want to look at the lacy edge and color change row and determine the WRONG side of the piece so far. From here on out, the WRONG side of the lace edge with be the RIGHT side for the stockinette. When the edge is folded up, the wrong side of the edging will be hidden in the fold.
Begin stockinette work until the piece is about 4" long. This will make a hat with 1" cuff (2" in half) and 3" body of the hat.
Decrease row (right side)- K5 K2tog across the row (Don't worry if you're off, just be sure to match the decreases in the next rows to create the line pattern on top)
Decrease row 2 - K4 K2tog across row, matching up decreases
Decrease row 3 - K3 k2tog across row, matching again
Decrease row 4 - Switch back to green - K2 k2tog...again, matching
Purl Decrease row 5 - K1 k2tog, matching
Decrease row 6 - K2 together across
Keep decreasing across the knit rows with K2 together until you're down to 3 stitches (keeping wrong side rows in purl)
Knit a 3 stitch i-chord to the desired length. I think mine was long enough to where I could have tied it into a knotSew up the side and flip the cuff.