Have you checked Lion Brand Yarn or Coats and Clark's Red Heart websites? They have free patterns...and I downloaded one for free from fabulousyarn.com (or fabulousyarns.com, I can't remember if the "s" is in there) for a diagonally knit baby blanket. They use baby alpaca yarn for it, and it's gorgeous. Bev's Country Cottage has a lot of free patterns, too.'
Almost any yarn website has free patterns, and there was a lovely baby blanket pattern in the last Family Circle Easy Knitting magazine. Also, if you live near a WalMart or someplace like that, they often have free leaflets that the yarn companies put out.
Just some ideas.