As a Welsh woman I am always very interested in sheep stories even if they come from Australia. According to this Reuters report
ugly lambs are usually culled - but now their genes are going to be studied before they are sent to the abbatoir. The ugly sheep will have genes that have gone wrong, and which will be easy to spot when compared to beautiful sheep. In this way the location of genes that are responsible for making beautiful wool will be found on the sheep's chromosomes - or 'flagged' as they say.
So eventually the perfectly-woolled super-sheep will be engineered. Not Dolly then, but something more sophisticated. A Dorinder, perhaps, or a Dorothea, treading carefully over the grasslands in her cat-walk fleece, not a morino fibre out of place.