I've been searching on here to see what I could find about muslin and it seems people usually use it for backing and within blocks on the top. I'm thinking about using it for 8-inch setting blocks, possibly tea-dyed? Would that be weird? And thoughts about quilting it?

Get the good, the one that don't winkle I have used it and it worked

I'm not a fan of muslin at all. Even the "good" ones seem to wear out faster than any other fabric in the quilt. You don't notice at first but I've been quilting for 45+ years and after time....the muslin gets holes and frays first.

Also, pre-wash no matter if you don't the other fabric. Most good muslin shrinks a tad more than regular cotton. To test spray it with water and then iron.

I agree I have had some shrink right before my very eye while ironing so it had to be quite a bit of shrinkage.
DO buy the permanent press muslin, but the bolt states even though its says preshrunk still has about 2 -3 percent shrinkage.

I personally don't like muslin.

I made a dresden plate using a good quality muslin for the squares I appliqued the plates to and it worked great. I washed it and dried it and ironed it. I looks good.

You can certainly do your own, but just recently, I saw 'tea-dyed muslin' for sale. It was a kind of a tan color. I don't know if it was the permanent press kind, but I had never seen it before, which is why I remembered it.

I don't like muslin in a quilt either...

Marshall's Dry Goods carries the tea-dyed perma press muslin by the yard and the bolt.