Thank you for the responses.
I think I am going to encourage her to contribute it to the auction. Either someone else will want the hat or I will buy it back.
Still, I have to admit that it's making not like this person as much as I once did and I am going to have to work on getting past that.
It has definitely taught me a lesson about knitting for other people. In the future I think i am just going to knit for close friends and family and other craftsters who can appreciate the effort.