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I'm sorry to hear that you're having trouble with the pattern. I'm not sure why you keep ending up with 42 stitches, but if you do the next time, it won't hurt to just decrease the last two stitches in an inconspicuous place in the rows before the Chevron Lace.
As for the loops on the cuff--you are correct that they come from the dropped stitches. It takes a bit of finagling with the dropped loops to make them very loopy, and blocking helps too. How loose or tight you knit is another factor. When I knit my first versions of these gloves, mine were much less loopy than the photo sample--probably because I'm a tighter knitter than the sample knitter was. Some people actually like the less loopy look better, while it sounds like you like it really loopy. In that case, perhaps don't start on the size 0 needles and just start with the 1s? I hope that helps!
I used this pattern for my first pair of mittens and used some Dancing (a discontinued fingering weight KP yarn). Mine werem't as loopy as the example on the pattern sheet, and I don't recall having problems with the stitch could. Once I finished the project I wasn't too impressed with the overall effect. Not one of my favorite projects, but it taught me a few things.
It's actually knit from the bottom up in one piece; the sleeves are knit separately to the underarm and then attached to the body and knit all as one till the collar.
Every time I knit anything with a Debbie Bliss pattern, it always comes out so huge!!! I have gotten to the point that I use the pattern as a reference and just create my own. Is anyone else having issues with her patterns?
Re the Chullo:
The applied I-Cord is best done wrong side facing (check Eliz. Zimmermann.) I did check this myself, doing it both ways, and applying it from the wrong side gives a smoother result on the right side--on the wrong side you can get peek-through of any color different than the I-Cord. Also, I'd suggest using markers for the decreases on the crown, easier to keep track of where to do the k2tog.
Size-wise, it seems to work up small to med for most people I talk to. If you have a larger head, you could add a 10 repeat or use a larger needle.
Other than that, awesome pattern! And a very nice warm hat.
I want to order the Pallet colors to make the Autumn Rose sweater, but when I choose "order the yarns as shown in the picture above' 3 of them are blank. Does this mean Knit Picks is out of certain colors? Are they coming back or do I have to pick new ones?