Kirsten,

I did some online research about toxins in fabrics and the most common are formaldehyde and the active ingredient in moth balls. It is recommended that new fabrics are "out gassed", placed in a well ventilated area for at least a couple of days to let the vapors dissipate. Cats are sometimes drawn to the strange smell of moth balls. The oily substance could be an excess of mucus production to protect the membranes of the nose and eyes. Watch for any strange behavior or change in gate such as stumbling and change in appetite. I doubt it could be poisoning without any accompanying symptoms but I would err on the side of caution. It doesn't sound like washing does much good.

Hope this helps.

P.S. This varies with type of fabric