This pumpkin is a fast and fun project. I was a bit of an idiot at the beginning, interpreting the "inc1" stitches as "m1", which didn't work out at all. I then realized that I should have read the "inc1" as kfb (knit in the front and back of the stitch). Once I figured this out (and felt pretty stupid), I flew through the rest of the knitting.
I used US 10½ - 6.5 mm needles for the body and US 5 - 3.75 mm needles for the stem. The yarn was Knit Picks Wool of the Andes Orange and Jalapeno. Final dimensions: 2.5 inches high (to tip of stem), 2 inches wide.
The felting happened really quickly. I am still felting by hand, but I started a variation of my normal technique. I put warm slightly soapy water in a mopping bucket, and then stir it with a large spoon. (I happened to be felting the pumpkin with a larger item, too. For something as small as this pumpkin I wouldn't have bothered.) This really saved my hands from overexposure to really hot water, and prevented me from accidentally reshaping as I agitated the fibers.
I lightly felted the stem, since the contrast of the felted pumpkin and non-felted stem was too high for me.