I can't remember the name of those felt pictures - the ones with lots of layers and stitching. Help!!
I think you are talking about a mola. These are made by the Kuna Indians of Panama. Traditionally they are part of their clothing but you can buy them as small blocks that have been made specifically for the tourist trade now.
According to Panama Arts:
The Kuna Mola is made by the Kuna (Tule or Dule) women, who live at the San Blas Islands in Panama (also known as Kuna Yala). Mola means blouse or clothing in Tule Gaya, the language of the Kuna and is an intrincately designed and sewn art work that the Kuna women use to embellish their dresses.
The Mola is a reverse applique technique in which several layers of cotton are hand sewn together, forming colorful designs which can be traditional geometric shapes or representations of everyday life. The Kuna mythology is also a frecuent theme. They are decoratively stiched for further embellishment.
Often, the best molas seem to be worn down. This is due to the fact that they are used for everyday wearing. After Kuna women no longer want their blouses, and decide to sew a new one, they disassemble the old one and sell the mola panels. This is regarded as a sign that the molas are genuine.
Hope this helps,