have you thought of using cotton, as in quilters cotton. I recently did a touque hat and felt the folded up part just didn't look finished and I didn't want to fold it over again to hem. I had a piece of bias binding left over from a recent quilt so I put that on it, and I really like it. I liked the touque so much that I did a blog about it and it shows applying the binding. Have a look.
http://quilt-knit-run-sew.blogspot.c...ouque-hat.html
good luck