Fill a pot with enough hot water for the fabric to move freely. Remember: Use 1 package of Rit powder or ½ bottle of Rit liquid dye and 3 gallons of hot water for each pound of fabric.
Pre-dissolve powder in 2 cups of hot water. Add pre-dissolved powder or liquid to dye bath. Stir to mix.
Wet fabric in hot water. Uncrumple and add to dye bath.
Bring dye bath to simmer. Stir constantly (back and forth, up and down) at least 30 minutes.
Rinse in warm water, then gradually add cooler water until water runs clear. Wash item in warm water with mild detergent and rinse thoroughly in cool water.
Wring dry so it's not dripping at all.
Start in one corner and twist the blanket. Hold the twists in place with rubber bands every 2" or so. If it twists back on itself just hold that in place with another rubber bands. Stretch the fabric out as you twist so it doesn't look like a giant knot.
Fill a squeeze bottle with full strength bleach. Do not add water. Working over a large bowl carefully squeeze bleach over the rubber band areas only. Carefully!
Let your blanket sit in a clean bowl for up to 4 hours. You will see the bleach start to pull out the color.
Using gloves again carefully cut off the rubber bands. Rinse your blanket until no more color bleeds before washing and drying.