I found this sight hoping to get the same info on removing a felt adhesive from sweatshirt material. I decided to just try my luck at it. It seemed it wasn't the end all but will help you get almost all of the adhesive out. I had some leather deglazer, basically acetone and, taking all precautions (protect hands with gloves, ventilated area, don't be near a flame, etc.) I would pour a small amount into a small container, dip an old toothbrush in the acetone and saturate the iron-on, or just the adhesive if that is the only part left. Next take a smooth somewhat sharp kitchen knife (no teeth, not sharp enough to want to cut a tomato with, but sharp enough for a cucumber (don't want to cut into the material beneath)), holding the material taught I scraped the knife with the grain of the material to try to get off as much adhesive/iron on as possible. I had a paper towel to wipe the gunk off the knife with.
There was still adhesive ingrained deep in the material, but this will at least get the material smooth for other cover up ideas.