I don't prewash any of my quilting fabrics except for flannel. Flannel I wash and dry *twice* before using it! This is because flannel can shrink so dramatically.
If the flannel pieces are 1-yard or more, I wouldn't bother overcasting the edges. I just cut off the strings and knots as I remove the fabric from the washer. For smaller pieces, putting them in individual delicates bags helps if you don't overcast the edges.
After washing and drying, I starch flannel heavily to stabilize it for cutting and piecing. To starch, I mix a 1:1 solution of Sta-Flo liquid laundry starch and water, lay the fabric on my kitchen island, "paint" the starch on with a large wall-painting brush, toss the saturated fabric in the dryer, and iron with steam. Believe me, this is worth doing! The flannel will come out about as stiff as cardstock and be totally stable so that you don't get any distortion when you cut or sew. Wash the quilt after binding to remove the starch.