I am glad that you are making progress with the fabric. I do think that a frank discussion with the local Project Linus coordinator is in order. Your chapter certainly does not want to be giving out quilts that cause health problems. For certain those quilts should not be given to children in hospitals whose breathing health may already be compromised. There may be other delivery locations that are not as critical.
It seems to me that your chapter may want to designate you as the "smell tester", because other people may not be able to detect any problem at all and you could catch the problem quilts before they go out.