Lots of humanoids in Zul'Drak, ghouls, banshees and nerubians all drop cloth. Or if you want easy kills, go to the Magnataur area in Borean, just north of the airstrip. At the bottom of the cave are a bucketload of cloth-dropping magnataur.
Also, I read that the mobs in Kaskala were good, but I'm there right now and they only see to drop one piece of cloth at a time when it does drop, not sure this is that great.
I might check out Zul Drak. I found the Minotaur cave and wasn't impressed with that, the Kaskula raiders seemed like a better area. There the boats just keep bringing the mobs in and you can aoe them pretty easily.