Bruce is quite right (as usual) in that dollar bills are made from some of the highest quality cloth fiber paper available, both tough and durable, which is why it does make excellent gasket material. "Paying" only a dollar for that sized sheet of such high quality material is a real bargain in estimation, just as drilling a penny (older when they were copper, but hopefully not a "wheat cent" or even older) is a bargain for getting a nice sized copper washer!
I've also had good luck using Teflon sheet as gasket material for our steam engines, coming in various thicknesses, it can handle a wide range of applications, though I must say that in the thinner sheets, it is a bit harder to handle and get good clean shapes made.