the quacking fiber addict

What if you knit it flat? It really would be in the shape of a sideways D, then you could carefully sew it together with a running straight stitch into the right shape, with the fold. I think it would work that way. Then when you felted it the stitches would disappear and you could tie a pretty ribbon around it. Another thought would be try making it with cloth first, like some stiff commercial felt or broadcloth, once you have the shape that it would need to be try knitting it, only bigger, and felting it. So far that is what I have come up with for ideas. I did find a couple of links that looked alright on Crafster for felted hats that might help you get started:

Bell
Lambs Pride Felted Hat

I hope that this has helped you out a bit. If I find out anymore I will make sure to post it.