If you would rather do the process yourself (or understand how it works, beyond "write out the ASCII set in thin pen, scan it, and email it to some guy"), here's a tutorial using only free software:
http://www.canonical.org/~kragen/oilpencil/making.html
This post really should have linked directly to the site of the people actually making the fonts rather than to some blog copying it. They seem to have dozens of fonts available -- although with really specific terms of use:
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[ 2.7 ms ] story [ 15.8 ms ] threadhttp://news.ycombinator.com/item?id=246669
http://kevinandamanda.com/scrapbook/fonts/fontsforpeas