Via Slashdot , the Times UK quotes paleontologist Gareth Dyke that dinosaur hatchlings could have been covered with mulitcolor fuzz like chicks. (He says "delicate feathery plumage.") This is based on finds at the Liaoning fossil bed in China, a site in which animals were buried in a volcalnic eruption with soft tissue details preserved.
I haven't been able to find a scientific paper specifically mentioning tyrannosaurus young. There was a Nature article last fall about feathery tyrannosauroids, and a 2003 story about a possible four-winged creature (i.e. both arms and legs) found at the site appears here and here .
I don't know why, I keep thinking about an easter basket with one of these little babies peeping out.