I'll throw in another recommendation for Falls Creek Outfitters. I'd also like to recommend an illustrator if you need help creating the patch's original artwork which will employ the amazing capability of Walter's machinery. For the Cross New Hampshire Adventure Trail, my partner Marianne Borowski worked with illustrator Spencer Hawkes to create the artwork for the suite of logos, stickers and patch. Spencer, who is an avid cyclist, did a fantastic job in capturing the spirit of the project. He also handled the interface with Falls Creek, including a few design enhancements to the samples to make the final product perfect.
I hadn't paid much attention to patch construction before observing this project, and frankly I was kind of blown away by the level of detail that is available from modern (CNC, I presume) embroidery machines. Makes me want to go see one in operation.
Good luck with your upcoming project.
Cheers,
Tom Matchak
Glen, NH