I knitted this sweet newborn owl hat for my friend Rose's baby boy Dominic.
I didn't really use a pattern for the hat portion. I just cast on with blue on 4mm needles and started knitting the ribbing, then switched to gray for the stockinette part at the top. A "sack"-style hat like this is knitted straight (no decreases for the crown), so it's very simple to do. I grafted the top seam and added a strand of each yarn color for the long tassels at the "ears."
I followed the instructions for the crocheted eyes and beak from Sarah Zimmerman's free Owl Hat pattern.