Burlap could cause a 'toenail catching' scenario.
DE will not prevent bugs.
Have some permethrin on hand, spray or dust, apply it
directly to the birds...
...and to the coop structure if you discover roost mites.
My Bug Check notes:
Have you checked them over real well for mites and/or lice?
Google images of lice/mites and their eggs before the inspection so you'll know what you're looking for.
Part the feathers right down to the skin around vent, head/neck and under wings.
Best done well after dark with a strong flashlight/headlight, easier to 'catch' bird and also to check for the mites that live in structure and only come out at night to feed off roosting birds.
Wipe a white paper towel along the underside of roost to look for red smears(smashed well fed mites).
Good post about mite ID by Lady McCamley:
https://www.backyardchickens.com/threads/my-chicken-has-mites-now-what.1273674/page-2#post-20483008