The first thing to do is to isolate the toes from the original source. I use pen tool, but you can choose another tool you like more.
step 2 of 10
I separated the toes and used clone tool to remove the toenails.
step 3 of 10
Making the caterpillar's body is the next step. I picked one of the toes and manipulated its shape with Liquify. With several copies of it we have almost the entire body.
step 4 of 10
Now, for the head and the tail, let's use another unmodified toe. The process is basically the same, but this time the sections have to be a little smaller.
step 5 of 10
Now the legs. Again, more Liquify tool to play with the toes' shape. Actually it's not as easy as it may seem, since you need to make several changes in order to get the desired overall shape of the caterpillar.
step 6 of 10
Changed the colour of the whole "thing" to a light green and added a gray background.
step 7 of 10
Colouring is another thing that frustrated me at one point. I looked up a picture of a caterpillar for a reference (http://www.morguefile.com/archive/display/170021) but no matter what I did, I could never give it the exact colour. I ended up painting until I thought it was okay.
step 8 of 10
The plant borrows it texture from the baby's foot. It's basically a long green thing with a texture layer embeded. I made the lightning and shadows with Burn and Dodge tools.
step 9 of 10
The leaves have the baby's foot texture as well.
step 10 of 10
Finally, I worked a little with lightning effects. I was going to leave it like this, but I decided to brighten the image.