I'd probably compost them, before I would use them as mulch.

I would have concerns that they'd hold moisture too well or too long. Forgotten woolen mittens or a sweater left outdoors remain sodden long after the top layer of typical mulch has dried out in a rare bit of winter sun. I'd follow JPW's suggestion and compost them.

If the blanket is in good enough condition, no matter how old, to be of value as mulch it may well still be of value covering some person that needs that wool blanket. That would be a better use than mulching, or composting, with it. If it is really too threadbare, or full of holes, to be used to cover a person and offer them some warmth it probably would be just as useless as mulch.

Like Kimm, I immediately thought about donating it to a charity if it's not positively holey. Wool is very warm. And I agree that it might stay too wet for too long as mulch, too. Thinking about how heavy and wet a wool blanket can be after washing.

Karen

I have some old wool blankets that came home with me wrapped around some furniture last summer. They are old and don't smell so good (they have a musty odor even after washing). I used them this fall to cover the garden at night (over hoops, under plastic sheeting).