Anthology of monsters or horror. One of the first stories was about a boy and his sister (or baby-sitter?), and the boy has an ugly doll with a red yarn string as a mouth. I think the yarn doll has a wire in the arm, and it scratches the girl, and she thinks it did it on purpose.
At the end of the story, the boy is wearing pajamas that look like those of the doll, and the boy starts to smile, and his smile stretches out into a red yard mouth.
I get the creeps just describing it again! Probably from the 1970’s. My memory is that it was illustrated, and hardcover.
It is one of the creepiest books! It is BALEFUL BEASTS AND EERIE CREATURES by Rod Ruth. The story you are thinking of is “The Patchwork Monkey” by Beverly Butler. To see scans of it online go to http://the-haunted-closet.blogspot.com/2008/06/patchwork-monkey.html
There was a wonderful short film by Susan Bell based on the story. You can see the trailer here: http://www.susanbellfilm.com/2011/09/trailers/#more-744
Baleful Beasts and Eerie Creatures by Rod Ruth (1976).
Contents:
Introduction by Andre Norton;
“The Patchwork Monkey” by Beverly Butler;
“The Yamadan” by Lynne Gessner;
“Monster Blood” by Charles Land;
“Tigger” by A.M. Lightner;
“The Spell of Spirit Stones” by Alice Wellman;
“The Night Creature” by Richard R. Smith;
“To Face a Monster “by Carl Henry Rathjen;
“You Are What You Eat” by Wilma Bedmarz;
“Nightmare in A Box” by Rita Ritchie.
Wow. I posted this question 5 years ago, and then forgot to come back and check regularly, and forgot I had even posted this. I remembered the book again recently, so I came back to this site – and the answer was waiting for me this whole time!