I've used old felt hats as well after reading lot of Elmer Kieth stuff but the problem with them is consistency of thickness and density. Duro-felt out of I believe Arkansas, can provide you very uniform quality hard felt at a reasonable price. I use it in my cap-n-ball revolvers.
Personally I believe the diesel gasket vegetable fiber wads are the way to go and you can make them yourself. I use both .030 and .060 in various calibers with the majority made of the latter.