I smoothed out the nose, but Im still stuck on how to shade the hat.


Here are my two cents.
I really think that hat is horrid.
The yoshi is pretty cool but the hat...
The perspective is off, he has an imaginary huge head in your version, or at least it looks like this at the angle the hat is on.
His cheek is also a bad gathering of banding.
banding is when 2 colors practically hug eachother.
This is an example of basically over AA, and banding.
Though I'm no guru on banding as I'm sure I actually did plenty of it in the edit I did for you.
You tried to smooth out that cheek line it seems and you over did it a bit much.
I made an edit though my cheek is rough you can see how I tried to break the solid lines.
Also, I noticed you jumped straight to textured nose before doing your volumes.
I'm wondering if you worked from a solid shaded sphere or if you just shoved the texture/shading on at the same time.