Getting a lot of hits about substandard wool. Due to a shortage during the 1800s, textile manufacturers began collecting old bits of wool and pressing them into fabric, creating a piece of material that looked fine, but which began to fall apart after a few weeks. This caused problems with Union uniforms during the ACW. Soldiers began to use the term to refer to things of poor quality. One of many links. Scroll down. Note: this link only discusses how one term became a pejorative, not the actual etymology of the word.
I'd take into account the 'scaddy' - there was a shift in usage where the 'c' switched to a softer form, so 'sc' became 'sh'. Scattered stones, torn up and re-used fabric, why not?
Please feel free to correct me. Thanks! 
= "Oh, is that how it's spelled!"
