I just remembered that one of my old knitting magazines had a pattern for a rug that used really big needles like 15mm or 20mm and then cast on as many stitches as you want your blanket to be using 10 or more strands of yarn. so sort out all your yarn in colours or mixes of colours and start knitting when one or more ball of yarn finishes just add another ball of yarn in what ever colour your fancy and knit away knit in the end as your go. came out really good in the magazine
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I understand that consignment shops can be picky about what they will take, but do you not have Goodwill, Salvation Army, and some of the other charity thrift stores? I have never known them to turn down usable clothes