I also buy steel from toolandie.com They beat the snot out of everybody on pricing and the service is excellent. Really above and beyond. Had a mix up on an order once, that could have been considered my fault as much as theirs and they fixed me up very well.
I'd really recommend you go ahead and order some O1. The heat treat is simple, the steel is clean, flat, annealed, and ready to work with. The price really isn't much more than hot rolled welding steel from the hardware store. Scrounging for steel can be fun, I've talked to a lot of guys who use old leaf springs, and all sorts of stuff. Thats more suited to forging than stock removal though due to the varying size and shape of the peices you find.
The biggest thing about using quality steel when you get started is learning to heat treat. If you work with new steel, you can use the same steel every time and work up a consistent heat treating method, rather than having to experiment with every peice and hope that its a usable steel.
If you do decide to keep recycling (not a thing in the world wrong with it, just can be more frustrating), one thing you should learn to do is a spark test on a grinder. This will help determine how much carbon is in the steel.
Basically you just touch the peice to a grinder and study the trail of sparks produced. A high carbon content will give you a forked spark that splits into smaller peices and doesn't travel very far. Some people describe it as "a big hairy spark". Low carbon will produce a spark that stays in one peice and travels a lot farther.
If you can get a peice of cast iron and do a spark test on it, you should really be able to see what a high carbon spark looks like. Cast iron has 2% or more carbon and sparks like crazy. Knife steels generally fall between .5% on the low end and 1% on the high end. If it shows a nice spark on the grinder, it should make a decent knife.
Some good stuff to look for are springs. If you've got a place in town that makes leaf springs, go see if you can look through their scrap bin. Most likely they will be using 5160 or 6150, both will make a good knife. Alot of bearings are made out of 52100 also, but they're more suited to forging due to their shape.