Yarn Issues

My son and I were inspired recently by something we saw which is basically a pillow with a built-in ipod holder.  I decided to use the leftover yarn from his patriotic cardigan to make this for him.  I'm using a E hook to crochet this piece.  However, this yarn keep separating and snagging and is making this take much longer than it should.  This isn't cheap yearn.  I won't mention the company name, but it is a well known company which is featured in knitting magazines and the like.  I'm making this in red, white and blue and have been working only with blue so far, so my hopes are that the other colors behave more!  I will post photos once this is complete.