Elfie-- I made it up... basically, I cast on 32 sts in the round, ribbed the bottom a little bit, then after 9-10 rows, I bound off 2/3 of the sts and kept knitting a couple more rows of totoro's face, and decreased a little bit so his head would be sort of round, then when I got to the ears I knit up the right one, bound off the middle part of his head, and then picked up the sts of the left ear with a second needle, and voila... I don't know if that makes sense; I suppose I could write a pattern if I put my mind to it. I'm glad you like it!
Calvina-- there's an interesting book about this (and other things) called Cute, Quaint, Hungry and Romantic: The Aesthetics of Consumerism
by Daniel Harris. You can read it on Google Books (how amazing is that?!) here: http://tinyurl.com/2ghh4o