Mrs.B says that it takes its name from ancient custom, explained in Bulfinch's Mythology; "By the pagan Saxons November 1st was dedicated to a goddess who presided over fruits and seeds. This festival - which some writers trace to an Oriental source - was called La Maes Abhal, or "Day of the Apple Fruit," a designation easily corrupted into "Lamb's Wool," which expressed a drink of roasted apples, sugar, and ale." However, August 1st is the more customary date for Lammas.
There is a reference to its service at Twelfth Night celebrations in Scouse and for Shrove Tuesday at Brasenose Ale
Original Receipt in 'The Book of Household Management', 1861, edited by Isabella Beeton (See Mrs.B)LAMBSWOOL, or LAMASOOL. - This old English beverage is composed of apples mixed with ale, and seasoned with sugar and spice. It takes its name from Lamaes abhal, which, in ancient British, signifies the day of apple fruit, from being drunk on the apple feast in autumn. In France, a beverage, called by the Parisians raisinee, is made by boiling any given quantity of new wine, skimming it as often as fresh scum rises, and, when it is boiled to half its bulk, straining it. To this apples, pared and cut into quarters, are added; the whole is then allowed to simmer gently, stirring it all the time with a long wooden spoon, till the apples are thoroughly mixed with the liquor, and the whole forms a species of marmalade, which is extremely agreeable to the taste, having a slight flavour of acidity, like lemon mixed with honey.