This stitch creates a shaggy looking texture that is used in baby books 124 and 8101 to look like a sheep. The directions are written for working in the round, but you could work it using an intarsia technique as well.

Loop st:
Rnds 1& 3: purl
Rnd2: * K next st without sl off left needle, bring yarn to front and wrap around left thumb creating a 7/8"-1 1/8" long loop, K in same st, yo, sl last 2 sts off right needle and over yo, K1 st; rep from * to end of rnd.
Rnd 4: * K 1 st, K next st without sl off left needle, bring yarn to front and wrap around left thumb creating a 7/8"-1 1/8" loop, K in same st, yo, sl last 2 sts off right needle and over yo, rep from * to end of rnd.
Repeat these 4 rnds for pattern