The notes on the first page say that the corrections are only relevant if you downloaded the pattern before 11/8/08:
.Line 5: k1, m1, rep around 36 stitches
Line 5: k2, m1, rep around 36 stitches
Also, there is a numbering FAIL in the leg instructions, unless the number 16 now comes after 19. The last four rows of the leg should be 20-23.
It looks like line 5 in the legs has been corrected but the line numbering is still incorrect later on.
You can decrease the cast on sts to whatever number will give you the size you want for your gauge. Or you can use a basic hat pattern that you've worked before as the pattern note suggests.