Some people say their hat size changed with dramatic weight loss. can this be possible?

Yes: Your skull doesn't change size but you can gain or loose fat around your face and head. It isn't as dramatic as say your waist but it will change size.

If you are a fathead: Most of our hat size is determined by the size of our skull, which can not shrink, but some people store fat on their scalp over their skull so losing that far can slightly reduce their hat size...