Natural Insulation?

Sheeps wool is outrageously expensive (about $5 per pound). Are there other good options? Thanks!

Northmen have done at least one house project with packed wood shavings as insulation.

If you are willing to put in some sweat equity, I bet you could source sheep's wool for a lot less than that. My mom keeps a small flock of sheep, and when the shearer comes, pretty much all the fleeces go in the compost. If you could get in touch with someone who shears, you might be be able to get them to gather you some wool for beer money.

Dont pay by the pound, though, as almost half the weight will be ... gunk. It takes a LOT of washing to clean up a fleece for spinning; probably less to use it as insulation. Still, it will be a lot of work, so probably not an option for a particularly large building. I have also heard of pine shavings being used - but youd need to find a good source for it.

Also, rodents love insulation, of essentially every sort. If you try and skip all the modern materials (plywood and sheetrock) just be very sure you build it tight so they cant get in.

I've been close with most of the people in the natural building field in my region. When goat hair (the waste from the cashmere/pashmina cleaning mill) was washed and used for insulation, the home owner suffered a terrible bug problem, and finally decided to remove it. I'm not sure which kinds of bugs it was. If you use sheep's wool, I would be afraid that it would breed wool moths that would then damage all my natural wool clothing, blankets and rugs.

They tried a final rinse with a boric acid solution a few years ago, on the goat hair. The first installations have been in place for two summers without bugs so far. I'm waiting a bit longer to see if that works long term, before installing it in my own house.

Early Mother Earths used to talk a lot about newspapers run through a hammer mill.  Borax was mixed in for the insects.

There are many straw bale home plans around.  

My parents' house is insulated almost entirely with what I suppose you could call wood shavings. Not sure about the proper English term, but bigger, flat pieces compared to sawdust (kutterspån in Swedish). It's packed between planks, the inside of which are covered in a type of paper to stop draft. Again I'm not sure about the proper term, tjärpapp in Swedish, which would direct translate into tar paper. However, it's not the type used for roofing, but more like thick paper containing some type of tar (duh) whether wood tar or petroleum-based I'm again not sure. This method works well, and if you know someone with a carpentry business you might get the wood shavings for free. If you compress the wood shavings as hard as you can between the planks, it won't compact over time and leave a gap on top (the way sawdust would if used in the same way). No bug problems, and the "tar paper" seems to deter rodents. Also very DIY-able...

Wood shavings could be obtained through industrial planners.   These are often used by companies involved in pallet or shipping crate manufacturing.

In my opinion the old methods of newspaper, wool and shaving have been bettered by the new technology.

The new material is far easier to obtain and use,it does not burn ior attract bugs and it does not compact down over time.
In this case I suggest old is not better!!