#1: Create a new document, mine was 300x300 and fill it with a background color, mine was #CCCCCC
#2: Create a new layer (Shift+Ctrl+N)
#3: Fill the layer with a "Reflected-Gradient". Darker on the outside.
#4: Now too make it point at the top, do 'Edit>Transform>Perspective'
#5: Too make a wavy like appearance, do the following: 'Filter>Distort>Shear' and drag the ball around in 2 places like shown.
#6: Create a new layer (Shift+Ctrl+N) and make a small white ball on top of the hat.
#7: Now too add a fluffy effect, do Filter>Distort>Ripple and slide the bar over between %75 and %115 (Now it should look somewhat like the image below)
#8: Now for the fluffy bottom, create a white rectangle, for the fluffy effect here, Filter>Distort>Ripper and I had my settings on %185
Now you are all done. Congratulations on making a simple santa hat!
More Tutorials: 
