I've been playing around with making stuff out of old sweaters that I have felted in the washing machine. Looking for inspiration, I did an Etsy search for recycled felt to see what the 'pros' are making. Check out these fun finds:
If you are inspired to try felting yourself take a look at my previous post - Felted Wool Fun. There are some tips and good links to get you started. It's easy and addicting!