Kathy, what was the brand of wool batting you bought? Off-brands of wool batting are notorious for having problems of shrinkage and/or odor. However, Hobb's Heirloom Premium Wool is supposed to shrink minimally. Here is the blurb about it at Connecting Threads:
http://www.connectingthreads.com/too...LWoolBtng.html
Also, close quilting helps prevent excessive shrinkage and distortion.