thrifty source for dish towels
If you are looking for a thrifty way get some dish towels for embroidery, then consider looking for some good quality damask table cloths at your local thrift shop. I find nice ones for three or four dollars and can make up to six or eight nice towels. I just run a serged edge and fold it over to stitch down, quick and easy. Then I use a soluble stabilizer to do a nice machine embroidery on one end. For a quick fix I will just put a bit of rick rack or a band of nice cotton cloth. I find the 12x12" napkins make for nice hanging towels with a matching fabric for a dish towel ensemble. One of my local thrift shops gets a yearly donation from local hotels with banqueting facilities so it is a good resource for linins. I will guess that if you call around in your area you can find one with similar donations.
If you are looking for the striped variety, try HomeSew.com or for by the yard, try Fabric.com