I have the same question and plan on testing later this week. I think it should be fine especially if I can find that new stabilizer that stays on or the heat removeal type. I want both kinds. After all felt is just 35 - 75% wool and the rest acrylic.

sounds interesting....

Embroidery on thin balsa wood is possible and I think any design suitable for cardstock would be suitable for balsa wood. I was interested to see what looked like quite dense designs on this site and wondered if they would also be suitable for balsa wood stitching.

I'd use a sticky stabiliser and no basting stitch - just make sure that the design was in the place I wanted it before starting to stitch.

I think that embroidery on wood would make really special stand-up 'cards', just attaching a piece of wood at the back to make the card stand up.

I'm wondering now if I saw balsa wood embroideries at the Phoenix Quilt and Craft Show last January - I know I've seen them somewhere this year.
AlmaG.

I've done some on balsa - it is just like using card. It is only available 10cm wide which is a bit limiting.