Well you see.. when a mommy loves a daddy.. and they get really close.. 
(I couldn't resist..)
I'd use fondant.. You can make the basic shape and add little arms that can stick out of the top of the blanket and the head will have to be the most detailed. then roll out a blanket at at least 1/8 inch thickness to give it a fluffy feeling and not have the body show through too sharply and lie it over the baby body with the head and hands sticking out the top and decorate to your heart's content. You could quilt the blanket before lying it on the baby too.
Now if you are looking to do it with BC.. I don't know.. I have never tried the technique given by the previous poster with the using the plastic wrap and making the blanket with BC.. sounds like it could work though if your BC wasn't too thin.
Too funny! Had to see what this post was about!!
There is a tutorial forum on how to make Marzipan babies-PM SweetTcakes and she will send it to your email. I'm sure you could use fondant instead of Marzipan, but it does look like it would take some time.
I am anxious to try it myself.
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