well, for the ruffle part you could do it separately, with double the stitches cast on, knit, then k2tog all across, then knit onto stitches on the bottom of the hat.
Or look up a fancy crochet stitch you could add.
I'm not at all sure how to do the top. My slash and burn costume approach would be to knit a large, skinny triangle, with a curved bottom and glue it to a sturdy paper cone. I have a hard time seeing knitting standing straight up like that for long.
what a challenge!