The Jester's Cap is a festival hat that was given out by the Avatar of Grenth in Kamadan, Jewel of Istan during the finale of Wintersday 2006. Players in each district had to show their support for Grenth by scoring points for him in the Nine Rings game.
Jester's Cap gallery
Click on any of the pictures to see the fullsize version.
The default color is very similar to red dye.