Find an image you like online, and drop it in here:

http://www.microrevolt.org/knitPro/

Their web application will grid it for you. I used this to do a college logo in a baby blanket. It worked perfectly.

Here are some free dishcloth patterns.

Here is a link that might be useful: Dishcloth patterns

Hi try these KNITTED dishcloths sites... should keep you busy for a bit.... One does have a duck...

www.purpleduckie.com/freepatternsindex

www.jmsyldesign.com/%7Edishcloth

CORRECTION OF WEB SITE/dishcloth designs:

should be: www.jimsyldesign.com/%7Edishbout

and try: www.knittingpatterncentral.com/directory/dishcloths.php

also try: www.knittingnonsense.com/index2.html

For letters, Knitty has a set of washcloths with words on them. You can get an idea of the planning process from their charts: http://knitty.com/ISSUEfall06/PATTbacktoschool.html

For pictures, this is a breast cancer awareness pattern:
http://askpoopsplease.blogspot.com/2006/09/awareness-ribbon-dishcloth.html

I think that cross stitch patterns will in general be too square for making a knitting pattern. But you can print knitting graph paper that matches your gauge: http://www.tata-tatao.to/knit/matrix/e-index.html

and then just draw/trace/superimpose your design.

Good luck!