One of the articles I gave you to read talked about crating a dog/puppy while you are not at home or at night. Crates can be a wonderful training tool if used correctly. Maybe you could give some thought to that. Puppy ripped up the blanket because puppy was bored. If she is in a crate she can't get to anything to rip it up. It's not her fault. It would be a great idea to do some reading and further research into crating a puppy successfully and then doing so. Nothing the puppy is doing is anything any dog would not do when it's bored out of it's skull.
http://www.animalforum.com/dpuppy101.htm
There's lots more articles available about crating as well. I'm sure someone with more time will be along soon to explain the fine details of crating.