Check out this tutorial from busylittleelf:
look at this redwork pattern! It is free at allsorts.
and here is a tutorial on needle felted elves, complete with pattern
this one is from craft elf
and look here for these cute paper doll elves
chickpeastudio has these elves that you can make smaller...she has a tutorial!!!
and these are found at hubpages...
and flickr has a whole page to check out here
craftgossip has these....again, you'd have to improvise but aren't they cute!
wee wonderfuls has free embroidery patterns (kinda big...but you could shrink them!)
thelongthread shares a tutorial for this ornament but with a change of colors, Santa turns into an elf! She has some AMAZING things on her blog...go stalk around a bit!
princessnimblethimble has wonderful bendy doll elves...and shares a tutorial on flickr
and this most adorable knit elf is at spud&chloe. I do wish I knit sometimes!
and a crocheted one too....pattern is for sale...
I hope these give you some ideas!