The Collaborative International Dictionary of English v.0.48:

Mungo \Mun"go\, n.
   A material of short fiber and inferior quality obtained by
   deviling woolen rags or the remnants of woolen goods, specif.
   those of felted, milled, or hard-spun woolen cloth, as
   distinguished from shoddy, or the deviled product of
   loose-textured woolen goods or worsted, -- a distinction
   often disregarded.
   [Webster 1913 Suppl.]

   Note: Mungo properly signifies the disintegrated rags of
         woolen cloth, as distinguished from those of worsted,
         which form shoddy. The distinction is very commonly
         disregarded. --Beck (Draper's Dict.).
         [1913 Webster] Mungoose