Ok so polyfill felting. most of the references i could find on the web were from before 2008. I think it is possible that the polyfill i found was created after that  but it works!!
It felts almost as good as wool. here is the cat I made....

 I was able to even shape the paws it seemed even better then wool in that respect.

This is the brand I am using I also made a little white mouse with it and it does get firm fairly fast. I am going to keep experimenting with it. as wool is pretty expensive. I think the biggest issue will be adding color. I was able to felt over

 this cat is wool over poly fill. no armature in this cat or the big whit one. I really wanted to try the big cat with more realistic eyes but my daughter really wanted the cute eyes.










I think i will make some more white critters and when my new wool gets here I will experiment with dying wool  and maybe ways to color the polyfil with pastels or even dye though i doubt it will work.