It does sound like moths. I can't think of any way to repair it so that it would look like it did originally. But you could turn it into an art coat by felting new wool into/over the places where there are holes. Maybe some very light grey or pale blue could be used to create an abstract winter fantasy. If this isn't a project you want to try yourself, you might try posting a request on Etsy.com's Alchemy section.
random-charm, March 2009