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.

I'd start water washing by hand-washing it first, before going to a full machine cycle. Wash it in a basin, with lukewarm to cool water, rinse well and then put the sweater gently in your machine and run a spin-only cycle to extract the water, then block the item carefully and dry flat. Use a cycle that only does a spin and drain, no water rinsing for the first machine trial. I use Eucalan Wool Wash, easy to find a yarn stores or on Amazon. It works in both machines and handwashing. After you've washed the item once or twice by hand you'll have a feel for how it reacts to water. The risk in all washing of wool is felting (fatal for the garment) due to the simultaneous combination of water, agitation and temperature. In all cases, if you severely limit at least one of these factors you should be fine. I mean that for the first machine wash (water and agitation), I'd wash in cold water. If the item is dirty enough to need lukewarm water to release the soil, then avoid agitation and only soak the item in slightly warm water (a non-moving 20-30 minute soak wouldn't be too much) and then rinse gently in cold. I do wash many of my woolens in my European f/ls, but only those I've tested first by hand washing. Handwashing is more forgiving and you can usually spot a garment's predisposition to felting beforehand in the first hand wash. Also the load size for machine washing woolens is critical, only wash a single, or at most two-three lightweight garments in your machine even if it could take a lot more of another fabric. The only exception to the very small load size is a large item like a blanket. I always wash sweaters inside out when they go in the machine to reduce pilling. Of course you would NOT dry a machine washed wool item in the dryer. They need to lie flat. And they may take awhile to get completetly dry. One other thing: the garment may feel a bit less soft once it is dry, especially one that was soaked for a bit. This because wool fiber is series of overlapping scales which can get themselves somewhat disturbed when wetted, giving the fabric a rougher feel. But given a bit of time the scales on the fibers will settle down where they belong and the soft hand will reappear. So don't fret in the first few days after a washing. Just lay the garment aside and let it takes its course. This transient roughness is different from felting which is irrreversible. Felting is the radical thickening and interlocking of the fibers. It's a disaster. HTH L..

@patann - All Free can have enzymes; check the label and call the company. The All Free Small & Mighty does not, but I think the basic All Free might. When I called the company, they wanted the UPC/SKU number on the bottle so they could give me a correct answer. Bio-Kleen makes a powder detergent, safe for 'he' washers, that has no enzymes. It is the one that is not 'premium'. Bio-Kleen liquid has no enzymes. Woolite Darks has no enzymes. If you have (or can use someone's) an old-fashioned top-loader (water hog), you can use Orvus paste or even baby shampoo for the wool blankets. The pH of Orvus, a livestock shampoo and perfect for protein fibers like silk and wool (and no OBAs), will be better for wool than the alkaline base of most laundry detergents.

As a spinner and knitter, I feel I should point out that we have some apples and oranges being discussed here. The felting tendencies of these fibres depend on their physical structure, especially the scales on the shaft of the hairs themselves. These scales are what hook together with water, heat, soap and agitation to form the fulled or felted fabric of a ruined sweater. Cashmere has very few and very flat scales and thus tends not to felt as much as a coarser wool. Merino tends to be the least 'felty' of the wools for similar reasons. Allendubner, your Goodwill sweaters may be of a more scaley type of wool than merino, and thus may not be good indicators. I'm getting a new LG washer and dryer this week (if LG gets their inventory act together and finally coughs them up!) but I hadn't intended to clean my handknitted stuff in there. But you've given me the incentive to knit up a few test swatches and try!