WIP: Hooded Baby Towel #1

I have reached a point on the first baby towel I'm making that I need to come to a decision.

First of all .. here is the pattern I am using .. losely .. to make these:

Materials:
Size 10 US needles (6mm)
5 x 100gm balls worsted weight Lilly Cream and Sugar 100% cotton

Gauge:
16sts and 26 rows to 10cm (4 inches) over garter st worked with Size 10 US needles

Size:
31" (77.5cm) x 27" (67.5cm) (excluding the hood)

Towel Body:
Cast on 100 stitches on #6 mm needles
Knit 200 rows in gater or seed stitches, cast off.

Hood:
For the hood, cast on 60sts and knit 5 rows in garter or seed st.
Knit 25 rows straight

Cast off 1 stitch at the end of the next 2 rows.
Repeat this every 5 rows until you have 40 stitches on your needle, cast off.
(Note from Deloris: I would change the pattern a little and cast off the hood at 44 stitches rather than 40)

Making Up:
Fold the hood in half vertically and sew the cast off edge together.

Fold the towel in half and mark the middle. Sew the cast on edge of the hood to the towel, matching the centre of the towel to the centre of the hood.

To finish your towel you can do some embrodery on it or crochet all around the towel and hood. You'll have a softer result if you wash it (before you do the embroidery or crochet) with a special mild washing soap for babies or kind of "zero".

Addendum: Sent to GLBT-knit March 3rd 2000

I made a few corrections to a better fitting hood
Cast on 75 stitches.
Knit 5 rows in garter or seed stitch.
After 30 rows, cast off 1 stitch at the end of every other row until you have 45 on your needle, cast off. (You can keep casting off one stitch until you have 4 left, then cast off)

Then, fold this piece in half and sew the diagonal line and the top. Sew the bottom of the hood to the middle of the blanket top.

This pattern is Copyright © Paskale Soucy, mimigazon@hotmail.com, all rights reserved.

Now, I say I'm using it loosely because when I began the towel, I started it with a smaller needle than it calls for. I'm using an 8US I believe, when it calls for a 10. Thus, my gauge is totally off. And I don't think that's necessarily a bad thing, as it's probably a much closer knit fabric than I would have ended up with .. good for a towel, yes? But now I'm a little unsure if I should continue with the hood or not, and if so, how I should do so. I'm not sure how the hood will look/feel if I make it separate and sew it on after. But I'm not sure how to go about going from 100 stitches to 75 withough a whole lot of funkiness going on. And I could try knitting the hood separate and then grafting the two together, but I've not tried that at all before now, and I don't want to mess this up.

I'm going to knit another 10 rows or so (1000 stitches .. yikes!) and see if I can figure out how to quickly drop 25 stitches. I really don't like the thought of sewing the two together.