Step 1: Gather some vinyl records. I bought mine for $1 a piece at a local thrift shop.
Step 2: Preheat your oven to 200 degrees. Place records directly on racks. I could only do 3 at a time.
Step 3: Once your record starts to warp, take it out (with your oven mitt on!), and begin cutting immediately around the center label. Use your judgement as to how much of a border, if any, you want around your coaster.
Step 4: After you have all your coasters cut out, set them out on newspaper in a well ventilated area (preferably outside), and spray them with a clear gloss (I used my floral sealer spray). I would recommend 2 coats on each side.
Step 5: Trace your coaster on felt or fleece material (I had some scrap material from a pair of sleep pants I made). Cut it out and glue onto each coaster (I used tacky glue).