Lots of enemies in the Wetlands drop small amounts of wool; the Mosshide Gnolls, for example, and the Dragonmaw Orcs in Dun Algaz (the lower level ones). The higher level Orcs in the area drop small amounts of silk. Another nice silk dropper are the undead in Ravenhill Cemetery in Duskwood. It might just be because I grinded on them for like 3 levels on my Paladin, though :-P
The lower level enemies in SM drop good amounts of silk too.