I haven't read the whole thread, but I breed finches.
I just wanted to ask everyone to please please please DO NOT give fabric scraps or threads to birds. They often pick at their nesting materials, which results in loose threads. Those threads can easily get tangled around the birds' legs, which cuts off the circulation. The lower part of the leg dies and eventually falls off, leaving the bird handicapped. Finch legs are no bigger than toothpicks, so even small scraps are dangerous. It's less common, but wings can also become entangled. An indoor, cage-kept bird can usually adapt to a missing limb, but for an outdoor bird, a handicap can mean the difference between escaping a predator, or not.
In addition, the fabric can stay overly moist in the birds' nests, which can cause mold and mildew. Birds, especially chicks, are delicate creatures with fragile respiratory systems, and it doesn't take much to make them ill (or worse).