thanks everyone for the ideas. I do shop at Connecting Threads. Thousands of Bolts and Fabric.com. I will check out their flannel now!

Can't recommend a source but I will recommend Moda flannel. Extremely nice quality and works up very nicely, at least with hand quilting!

There are some good sites mentioned here. You can also use fleece to do rag quilts. The good thing about them is they don't frey they just curl at the ends. Just in case you can find a good source of fleece. I made one rag with flannel designs on one side and different colors of solids on the other and then appliqued designs on the solid side (opposite of the cut edges) it turned out really nice and made it two sided