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RE: Using a Circle Loom to Make Baby Hats - Needlework Monday
The step up from potholder loom is a rigid heddle loom; but they're expensive if you buy one new. I have one that my friend found at an estate sale for me (she is the type that enjoys checking out garage sales and estate sales and the like just for fun and she knew I was looking), but I've also seen instructables for building one out of cheap materials online. You'd need someone who could drill holes into thin pieces of wood, like popsicle sticks or balsa wood, but other than that the construction would be pretty simple, I think!