Some quilt shops do sell wool in small peices , some felted some not. I have taken to buying items at the thrift store ( sweaters mostly) and felting my own. It's so easy to do that many have experience doing it by accident. Take the wool sweater throw it the wash on hot , and its felted. I like to by the lighter colors as I can then dye them to suit my needs . For wall hangings and I only need a bit I use koolaid for dye. My best find was a women's Pendleton wool suit , ivory colored. Got lots of great wool from that find.
There is a lot of blended fibers mixed with wool that have been felted, as it keeps the costs down.