When Nathan was first born, Ben's nephew's mom, Michelle, made him a hooded towel from a regular sized adult towel and cute ducky washcloth. She just sewed the washcloth into the middle of one side of the towel so when you put his head in the washcloth, the rest of the towel wraps around him.
When Ben's good friend Colin and his wife Kristine had a baby a couple years ago, I thought I could make them a towel as well. The washcloth I found had 2 little frogs on one side. To make it work, I ended up having to cut the washcloth in a triangle, then sewing it in the middle of one side of a regular white towel. The tie everything in, I stitched green yarn all the way around the towel.
For Audrey's baby shower, I was so surprised when Wendy gave me a towel she made. This one is sewn out of soft terry cloth fabric, not towels. The hood is a triangle sewed into a corner of the towel. On the hood, Wendy hand embroidered Audrey's name in pink thread.