Preemie hat pattern

I came up with a pattern for the Head to Toe contest the Knitmore Girls are hosting on thier website and on Ravelry. It uses up bits of leftover sock yarn and is inspired after the Ball Band dishcloth. So I give you, the:
Ball Band Baby Hat


Sizes: Preemie (Newborn)
Yarn: Any leftover sock yarn; 2 coordinating colors
Needles: US 1 (US 2)

CO 70 (90) st, join to work in the round.
Work 6 (8) rows of garter stitch (K one row, P one row)
Begin St St. Work 10 rounds even
Join color 2 (do not cut color 1)
Next round: K4, sl 1, *K5, sl 1* repeat around ending with K1
Next 3 rounds: P4, sl 1, *P5, sl 1* repeat around ending with P 1
With color 1: K 2 rounds even
Color 2: K1, sl 1. *K5, sl 1* repeat around, ending with K4
Next 3 rounds: P1, sl 1, *P5, sl 1* repeat around, ending with P4
With color 1: K 2 rounds even.
Color 2: K4, sl 1, *K5, sl 1* repeat around ending with K1
Next 3 rounds: P4, sl 1, *P5, sl 1* repeat around ending with P 1
Cut color 2 leaving tail long enough to weave in end.
With color one, K 6 (8) rounds even in st st.
Purl 2 rounds
Begin decreases as follows:
*K5(7), k2tog* around
K one round even
*K4(6), k2tog* around
K one round even
*K3(5), k2tog* around
K one round even
*K2(4), k2tog* around
K one round even
*K1(3), k2tog* around
K one round even
Preemie hat - k2tog around for 2 rounds ending with 5 st on needle. For flat top, cut yarn (leaving end long enough to weave) take tapestry needle and thread through remaining 5 stitches on needle and pull tight. Weave in all ends. For knotted top, knit 2 inches of I-cord with the remaining 5 stitches, cut yarn, weave tail through 5 st and pull tight, weave in all ends.
Newborn hat - continue with decreases as follows
*K2, k2tog* around
K one round even
*K1, k2tog* around
K one round even
*k2tog* around, for 2 rounds
For flat top, cut yarn (leaving end long enough to weave) take tapestry needle and thread through remaining 5 stitches on needle and pull tight. Weave in all ends. For knotted top, knit 2 inches of I-cord with the remaining 5 stitches, cut yarn, weave tail through 5 st and pull tight, weave in all ends.