I've used flannel a couple of times, and have not been disappointed....I washed and dried first (but only once). I, too would only buy from LQS....Joann's just isn't as good.
I've heard you should not use fabric softener with the flannel. It supposedly makes it wear out faster. Perhaps this explains why pajama flannel doesn't seem to hold up. Many of us are in the habit of using the fabric softener products.