With circular needle and 2 strands of yarn held together, cast on 88 sts. Place marker for beg of rnd. Join by knitting the first st on the left hand needle with the working yarn from the right hand needle and being careful not to twist sts.
Rnd 1: Purl.
Rnd 2: Knit.
Rnd 3: Purl.
Rnds 4-7: Knit.
Rep Rnds 1-7 once, then rep Rnds 1-3 once more.
Next Rnd (Inc): K6, slightly separate the 2 strands of next st and k into each strand separately (1 st increased), *k8, k into each strand of next st separately; rep from * around - 98 sts at the end of this rnd.
Work in St st worked in the rnd (k every rnd) for 8 rnds.
Seed St Band
Rnd 1: Purl.
Rnds 2 and 3: Knit.
Rnd 4: *K1, p1; rep from * around.
Rnd 5: *P1, k1; rep from * around.
Rnds 6 and 7: Knit.
Rnds 8 and 9: Rep Rnds 4 and 5.
Rnds 10 and 11: Knit.
Rnd 12: Purl.
Work in St st worked in the rnd for 13 rnds, then rep Rnds 1-12 of Seed st band.
Work in St st worked in the rnd for 11 rnds.
Shape Crown (top of Hat)
Rnds 1 and 3: Purl.
Rnd 2 (Dec): *K12, k2tog; rep from * around – 91 sts at the end of this rnd.
Rnds 4-8: Knit.
Rnds 9 and 11: Purl.
Rnd 10 (Dec): *K5, k2tog; rep from * around – 78 sts.
Rnds 12-14: Knit.
Rnds 15 and 17: Purl.
Rnd 16 (Dec): *K2, k2tog; rep from * around to last 2 sts, k2 – 59 sts.
Rnds 18-20: Knit.
Rnd 21 (Dec): *K1, k2tog; rep from * around to last 2 sts, k2 – 40 sts.
Rnds 22-24: Knit.
Rnd 25 (Dec): *K2tog; rep from * around – 20 sts.
Cut yarn, leaving a long yarn tail. Thread tail through remaining sts and pull to gather. Knot to secure.
Weave in ends.