I’ve been searching for this picture book for a few years with no luck. It was a favorite of my childhood, and so well loved that the book literally fell apart. My dad had it memorized for a few years, but has since forgotten it.
The book was about elves (possibly gnomes) going to a costume party. It was a counting book, and it rhymed.
I know on the second page it described elves coming in twos, “they came dressed as a pair of shoes.” The following pages had rhymed costumes for fours, sixes, etc.