here's the link to EmbLibrary's article on embroidering on sweaters. I don't know that I would hoop the sweater as outlined in the article, but definitely use cut-away stabilizer and a topper.
Embroidery Library has instructions in "Projects" for many fabrics. So far you got pretty good ideas.
Rachel
Not sure for sure - but it might be that you haven't stablized it correctly - you will need a heavy stablizer in the bottom and you might need several layers of WSS Topping, too.