The idea for how to do this was inspired by ShampooTeacher (as I've seen him on spritestitch).
The background is painted with acrylic paint, hand-graphed 1cm by 1cm from a screenshot from inside the coop of the SNES Harvest Moon. The colors are far more realistic than I intended them... kind of looks pretty drab compared to the POP of the perler beads. But oh well!
The chick is a simple chicken sprite from the game, done in 2x2 bead fashion to match the 1cm squares. The chick is simply glued on top of the center of the screenshot.
This was my first experiment with painting on canvas, and it was pretty annoying! It took a good 3 coats for the color to stick, and for the more plentiful squares, if I didn't mix enough of the same color, I was pretty screwed. ShampooTeacher did a much better job with having his Mario on a solid background, not having to worry too much about lining the pegs up with the grid perfectly.