That's such a hard choice. I hate to see them cut up but I understand why. I have seen some stuffed teddy bears made out of older quilts.But if the fabric won't hold up, that is not an option. I love the idea of appliqueing fabric over the ones that are decaying. I have also seen blocks framed. Maybe a few blocks could be sacrificed for fabric and a whole block could be framed. You may have kids or cousins that would appreciate a grandmother's block.