There are so many. Try looking at BunnyCups retired sets - there are even beach/ swimming ones there and they sew out beautifully. Hope this helps.

Yes I agree. Bunnycup is a great site. I have a lot of Ashley's sets and every one has sewn out perfectly. I have used them on towels. I think she has a retired set .. Fairy Princess might be suitable. I have used this one. Also Bunnycups Bugs.

Try Turquoise 210, it is a french blog with a lot of free designs, I did a NODNOD on a towel for a 2 Years old girl for christmas present, she loves it. There is a lot of adorable bears too. Write her name, she will began to try to read it too.
http://turquoise210broderiemachine.over-blog.com/
Go to "catégories", "broderies gratuites" (on the right)
Alice
France

Maybe you like this from Husqvarna, a Little Princess