I'm using Red Heart Eco Ways. It's a cotton poly blend and it's nice to knit with. (The sheep are Encore)
I tried again and this time it came out TOO loose. I've done a little fair isle before, but the stitches were close enough together, more traditional, so it wasn't quite as bad as this has been. If I could knit inside out it would probably stretch the floats enough to make it work, but the rolled edge seems to want to keep flipping back out the correct way. I'll try yet again, the hat is too cute not to!