when I make mine with falnnel I do not prewash - ever - it will not rag. Raging also depends on on how wide your seam is - the wider the seam less ragging will occur. I try to keep mine 1/2 inch for flannel and regular cotton fabrics and bit wider for homespoons. and 1/4 between cuts. Wider seam or more spaced cuts will live you with the fringe that will never rag.
I use almost any fabric and found that blends do not rag as well - more fringy.
As sweetwaterquilter mentioned do no prewash fabrics - flannel or not - it tends to remove fibers and you will never get the effect you want to achieve.
I have made a lot of rag quilts and have never had that problem. I never prewash the flannel. I suspect prewashing would affect the ragging. I have always used flannel on the back as well although I have seen some with home spuns that rag nicely. I might try clipping closer together or washing another time or two. Good luck. Hope something works for you
Did you back it with flannel or jean fabric? Was the fabric pre-washed? I am ready for the same adventure! Just learning through osmosis.
I have found that sometimes I did not snip close enough together, or that I needed to wash them a few times to get them to rag nicely.