I posted a loooong time ago about a t-shirt shag rug I made. I had a lot of requests for a tutorial, but I never got around to making one. Today, I found a tutorial for a t-shirt latch hook rug on Pinterest. I made mine differently, but the look is the same. For mine, I made a t-shirt base by sewing two t-shirts together in the shape I wanted my rug. I then sewed on the cut pieces of t-shirt in a spiral onto the base. For my version, I would recommend drawing the spiral line of where you want to sew the t-shirt pieces on, to make the process easier and more uniform. To make the pieces to sew onto the base, I cut up the t-shirts into t-shirt yarn, then cut the yarn into pieces double the length I wanted the shag to be. You will sew on the pieces in the middle of each piece, doubling them. I think my version would also work great for pillows or blankets.
Good luck! I will try to make a photo tutorial on this someday!