I make peg loom rugs and had some samples at the smallholders that were much admired and some folk went off to make there own.My first rugs were made from washed and carded fleece and then torn into strips and weaved,this gives a neat lokking rug when finished.You can also use washed fleece and just weave it in and out without carding this gives a rougher appearance resembling a sheepskin rug look and is a lot less time consuming as you havnt had to card the wool.I hve alos used matted wool that wasn't much good for anything but didn't give as good a result.You can aso use torn rags or plastic bags the worlds your oyster.Great fun and easy to do.The most time consuming bit is measuring and threading and setting up the pegs to start.It grows quick,Make sure to use a strong enough warp thread to be able to withstand the weave as you don't ant it to break,which it can as it get bigger.Ive always washed the wool 1st but ,could wash on a wool wash after wards.Aso read someone uses raw unwashed fleeces for making camping mays for sleeping on ,comfy and waterproof maybe a bit smeely ,then composts them at the end of season.Good luck the problem is time which seems to be never enough to make all these projects