I was really inspired by the Poor Mojo squid hat years back and even made a knitted version of it at one point. However, knitting takes a long long time(for me anyway!) and so I was determined to make a sewing pattern...but had to learn to use a sewing machine first. This year has been full of learning all kinds of crafting skills for me and I think it really paid off at last.
You can find the pattern for this project here:http://tangrala.blogspot.com/2008/11/diy-squid-hat.html
The original inspiration from Poor Mojo is here:http://www.poormojo.org/pmjadaily/archives/006697.html
Also, big hugs to Kristen Perry for teaching me to sew and read sewing patterns!http://www.merekatcreations.com/
Edit: There are two really simple ways of modifying this pattern. You can alter the shape of the ends on the big tentacles and top fin, like turning them into hearts! Also, making the backsides of the fabric an alternate color and adding alternate color appliques(spots, stripes, stars, etc.) will give the hat more dimension.
The next one I make I'm going to try to find some conductible thread to make light up eyes. I'll probably drill a hole in the black eyes and insert an LED there.