Make 2 granny squares:
Using 4mm hook, DK yarn. Start in pale blue, magic ring or Ch4 and join to make ring. Ch2 in this does count as a stitch.
1) Ch2, 2HDC in ring, Ch2, [3HDC, Ch2] 3 times. Should have 4 clusters interspersed with Ch2. Sl stitch join
2) Change to dark blue, Ch2, 2HDC in Ch2 space at corner, Ch1, [3HDC, Ch2, 3HDC, Ch1] 3 times, sl stitch join
3) Change to pale blue, Ch2, 2HDC in Ch2 space at corner, Ch1, [2HDC, Ch1] in each centre space and [3HDC, Ch2, 3HDC, Ch1] in each corner, sl stitch join
4) Change to dark blue and repeat row 3, finish off
Put right sides of two squares together and stitch together on 3 sides. Turn so that right sides face out
Make tassels (this may help: http://www.dummies.com/how-to/content/how-to-make-a-tassel-out-of-yarn.html) and attach to top corners of hat.