#4 - Sept. 15, 2011, 4:54 a.m.
This actually isn't a bug. Our item designers place the items like that so they look like they are sitting on the character's (invisible) head. The Monk has some cool jewels he wears on his forehead that look like that too.
Good catch though! The alternative would be to center it on the box, which would make it look like the hat is covering the character's face on the paper doll.