The water blocking component doesn't have to be visible on the outside, it just has to be there quietly doing it's job. Use plastic from a freezer bag, or cut up a plastic dropcloth if you're making a lot of them, and put the layer between the backing and the inner padding of each coaster. It can be machine sewn, saving time, but remember that each stitch puts a hole in the barrier so edges only is best. I think batting is wimpy for coasters, so I use stiff interfacing, Fast2Fuse or Decor Bond, instead.