Did you prewash your flannel? It has a lot of give to it, and there is a lot of variance in how much flannel will give from bolt to bolt. Some flannels are a lot tighter woven than others and don't give as much. I confess that flannel is the only fabric I always prewash. It might help to work with smaller blocks. When I've made rag quilts I usually use an 8" block, sandwich each block and quilt (I just put a simple star or X to hold the layers together then sew around all four edges just inside where my stitching line will be), then sew the blocks together.