Knitting Frustration

I have to knit a baby hat for a one-year old cousine. She is so cute! I wanted to try the same pattern I used for my first hat, taken from www.yarnharlot.com. It's called the "Ken Dulaan" hat, but I don't do the I-Cord as for now. The problem is: I don't have the huge yarn, and my biggest needles are 8mm. This means the results are smaller. Now, for the first attempt, I used the pink 50% wool / 50% acrylic ball. It looks so nice! The problem is, the hat is too small. Looks like a doll hat. I added a yellow ribbon.

Then, I tried again with the strange multicolour dark wool/acrylic/alpaca yarn. It was SO hard to work with. Really. It is... "hairy". Lots of little hairs of alpaca came out as I knitted, and I eventually breathed some. I had the alpaca hairs in my throat. It wasn't a nice experience... I casted on more stitches but... still it looks small. Maybe it won't be small on the baby's head, who knows. I added a pink ribbon because the yarn is so dark! What do you think?

So: I'll have to tell the parents to use these as hats for the girl's dolls when she'll be older. I don't think she'll be able to wear them :( Gauge and those things are frustrating!

Love,

Flavio