Although cutting up an afghan is not the easiest, I think it can be done if you use a serger.
This coat I made for my daughter was all made out of thrift store sweaters, washed in HOT water and dried until it shrunk a lot, not sure if that would work with your afghan.
But then everything was cut while serging, so I could be sure that all the loose ends were dealt with immediately.[ATTACH=CONFIG]605312[/ATTACH]
The top is more like a hood not a cap, so sizing wasn't an issue for me, believe me there were plenty of other issues![ATTACH=CONFIG]605313[/ATTACH]
Dont know if this will help, but good luck!