Marshall Dry Goods in Batesville, AR is a good online source.
I talked to three different quilters who were shopping at WalMart, and they had good things to say about the Waverly fabric. When I went online and read different articles about Waverly fabric, I read that it is comparable to Kona Cotton. I bought an armload of it, took it home, serged the raw edges and put it through the washer and dryer on a normal cycle with hot water. Compared with the Kona Cotton I have, they appear the same.
When I am in a thrift store, I head straight for the place where they hang the fabric or have it rolled and tied into bundles. If you see polished cotton that has instructions on the selvage to dry clean only, ignore that and put it through the washer and dryer. That washes out the starch and sizing and what you have is soft cotton. Quilt Guilds will sometimes have sales of member's excess fabric or fabric that has been donated or willed to them. Bonnie K. Hunter of Quiltville.com fame has a book out on making quilts from thrift store men's shirts.