Making a new quilt for your dad is a wonderful gesture and I would wrap it for him even if it isn't quite finished. Until you have had a heart to heart with your dad about the sentimental value of the old quilt to him, I would leave it untouched. I am inclined to agree with the others that he treasures it for the memories it might hold of your mother, and to transform it into something else might not be to his liking.