best places for felcloth is all the jadefire demons in felwood, Ive grinded there for I think nearly 3 lvls now, starting with the lvl 51-53 mobs then moving to the 52-54. I have gotten around 30 felcloth in that time. Two nights ago I grinded for 4 hours and got 10 cloth.
The two locations are, the lower lvl ones are south of the outpost a bit and the higher ones are in jadefire run way north (follow the path and you will go right poast them) They are just before you reach the furlbog camp.
Its not rare but its not common, to give a relation, during this time I also got mageweave (from the lower lvl ones) and runecloth from the higher ones. At the end of the first session I had a good 200+ mageweave, second session I walked away with about 150 runecloth. As well as an easy 25-35G in coinage