I was just thinking about this again. I believe it makes something of a difference in how you intend to use the wool for quilting.
Felting wool to the max is what is used when you want to use it for applique. Felted wool does not fray, so there is no need to turn the edges under.
On the other hand, since this is yardage, you may be thinking of using the wool to make pieced quilts. In this case, I think Holice is right -- treating it much as you would for garment making. I would probably simply soak it in hot water, rinse in cold water and (being me) would possibly throw it in the dryer.
When a quilt is pieced and then quilted to a moderate degree, the batting is what ultimately controls shrinkage of the fabrics in the quilt. That is, the fabrics cannot shrink more than the batting shrinks. (This does not apply to tied quilts, or to quilts in which the quilting is 12" apart. That is not enough to create a single "fabric" out of the three layers of the quilt sandwich.)
I attended a workshop given by Harriet Hargrave, and she showed us a quilt she had pieced entirely out of flannel, with flannel backing. She did it with *unwashed flannel* to prove that it would not distort after washing and that, even though it was flannel, the flannel would not shrink more than the batting. She measured the quilt before and after washing, and shrinkage was what would be expected from the batting. She showed us the quilt, let us feel it and examine it up close, and the quilt was beautiful! Of course, she had done her usual machine quilting magic on it, but it was a moderate amount of machine quilting -- not dense quilting. The same should apply to wool fabric.