I've just finished this sweet little project. Isn't it cute? I love the little knot at the top!
This was a free pattern I downloaded from www.craftsy.com
Called "Baby Hat with Top Knot - Tegan", it was designed by Julie Taylor from the U.K. It's made with double pointed needles (two sizes) and actually should look like this:
My hat doesn't curve in at the bottom because I only had the larger size needles. That's why I rolled up the brim. For wool, I used Bernat Softee Baby. The directions were so simple - good for working on while watching TV, etc.