Charity/Thrift shops are probably your best bet, they're normally pretty cheap in there. I found that cutting the sleeves off with a small saw blade, like a hacksaw or the little one you get on a swiss army knife, makes the edges look pretty rough and cool if thats your thing. For me cutting them off with scissors leaves too neat an edge.
As for patches, i normally get mine from ebay, concerts or festivals. Festivals are the best bet i found, most of the merch stalls will have deals on. There was one stall at bloodstock this year that had 5 for £10 or something like that. The only problem with stuff like that is you may not be able to find a specific patch you want, if you just want one of "x" band you'll probably be fine, but if you want one of a specific album ebay is probably a better shout. That or look on the record label sites, they normally have a pretty good stock of patches for their bands.
I would stay away from printed patches though, they tend to wear out pretty quick and crack or peel if you're not careful. I only get printed ones if i want a specific album and the artwork is too complex for embroidered patches.