Just before we moved, I was faced with a similar situation. My husband's grandfather passed away and I immediately felt the need to make a quilt from the many shirts he had accumulated over the years.
When I began the project, I didn't take into consideration how different it was to have known the person, and this made it difficult. We found his place holder from our wedding still in his jacket pocket. But I also found that as I sewed, I got to know more about this man I'd only met a few times when visiting on the holidays and this made me happy. He had a colorful choice in shirts, and his experience in the menswear field was evident in the details of his ties, his handkerchiefs, and his pocket squares. I enjoyed all the little details of his wardrobe.
I completed this 3 x 3 mini-quilt as a practice run. It was very dark and while I loved all the menswear details, it made it difficult to make the quilt more flat and harder to upkeep as a real blanket.
When I set about making the quilt for Nan, I made sure that I chose a clear color story. I wanted it to reflect her cheerful and bright personality and be something that would fit in with the rest of her room. I also kept some of the menswear elements, like the sleeves and button-down front, leaving the collars and bulky handkerchiefs out, so it could be more comfortable and easier to clean. The backing, the binding, and the blocks were all remnants of Pop's shirts.
I gave her the finished quilt on her birthday. She remembers all the places Pop wore the shirts in this blanket, and now she can keep herself warm on cool nights with something that has real meaning.
My technique for the binding can be found on the Heather Bailey blog, Hello My Name is Heather.