I came across this tutorial in my YouTube subscriptions. It is done using Maya and Photoshop. But, the technique can be used in any 3D modeling and paint program. It runs 35 minutes. I like the ideas presented.[youtube 6Wi4-fdeYyM]
If you notice, this is a CG Cookie related video. The CG Cookie version is here: Creating Polygon Hair for Game Characters. CG Cookie is a great site for 3D modeling tutorials.