I wanted to make a few "rocks" for an art project, and thought it could be fun to show the process as a tutorial.... I made slightly larger ones (4-5 inches across) a couple of years ago for my baby grandson, and he quite enjoyed throwing them and fetching them all over my living room.
Here is a photo of rocks piled together drying on a towel. Most are 2 - 3 inches long and less than one inch thick. For kids you want them thicker, but for mounting on a wall hanging felt display, flat is best.
Start with a slab of foam, like you would use for seat cushions. You can find them at a crafting or sewing shop.
For small rocks, cut a rectangle about 1 inch wide, and 3 inches long, using the 2 inch depth as is. For larger rocks use 2 inch depth at your smallest side and cut 3 inches by 4 inches.
From the rectangle shape, use scissors to trim out all the sharp angles and corners, creating an oval shape and bevelling a bit of a curve to the edges.Lay your wool fibre in two layers, one in each direction on top of a layer of plastic, and on top of some bubble wrap. Use grey, white, brown and even some yarn if you like, on the outside of the rock to create more details. This one is just natural white.
Roll the plastic around the wrapped rock and gently rub the package against the bubble wrap. Keep flipping and rubbing in every direction, increasing the pressure of the rub as the fibre becomes more firm. Eventually, when the surface is fairly firm you can take it from the plastic wrap, and rub it in every direction directly on the bubble wrap, dipping it into hot soapy water if it feels too cool.
Stop when the rock is soft but firm on the surface, and it has clearly shrunk to about 70% of the original size. Rinse in cool water and squeeze to remove soap and let air dry.