I ended up using a wool/acrylic blend sock yarn for the second yarn, with three strands held together. I strung glass beads onto the sock yarn - gold on one strand and iridescent fuchsia on another strand; one strand was left empty - and then knit the contrast band in the required garter stitch. When I came to where I wanted to place the beads (I placed them every fourth stitch, staggering them between rows, and alternating colors between rows), I slipped a stitch purl-wise, scooted a bead up to the stitch, then returned the yarn back to the rear between the stitches and continued knitting. On purl rows, I did the same thing, without moving the yarn to the other side before slipping the stitch. Or something like that. It was obvious what I needed to do once I got to that point.

I added one increase row before I started knitting straight, and the hat still came out very snug for my head. It fits Ariana (12) better. If I make it again, I will add maybe two more increase rows, and not subtract rows at the end…it could be a little bit longer, because it curls at the edge when it’s finished. All-in-all, though, I think it turned out beautifully!