I've never been to this place and I was wondering how difficult it was compared to the "real" game (at the same level of difficulty). For instance I killed Diablo in Hell without much trouble, would Whimsyshire in Hell be a bigger challenge?
I have only experienced Whimsyshire on Normal difficulty, but the monsters there were on par with what you face in Act IV. I brought a level 24 friend along and he was getting stomped pretty hard (but not oneshotted). I, as a level 32ish wizard at the time, found the creatures appropriately challenging to my level.
I would assume that in higher difficulties, Whimsyshire is similarly scaled to be roughly equivalent to Act IV of that particular difficulty.
If you can do the difficulty higher on Act I with minimal problems, I'd say you are ready for that difficulty of Whimsyshire.
So if you can take Nightmare Act I, you are ready for normal Whimsyshire.
Note that with a group of 4, this can change drastically. Soloing will not be a problem at this point however.
Also note that there are no ranged monsters in Whimseyshire, aside from possibly the Mortar mod on elites. Depending on your character, this might make it significantly easier than similarly-leveled areas.