I'd pick out the big pieces, then wash the wool in warm water with some Orvis soap or Ivory dish soap. This will get the dirt as well as some of the lanolin. It's what we use to get show animals clean. Rinse well and let dry. You can put it in a tied pillow case and spin it in the washing machine to get extra water out. Card it to get the foreign material out. The carded wool is a roving and then needle felt it. Not all wool is used for yarn and handcrafts. Different breeds of sheep will give you different types of fiber and your results may vary with what you're doing.