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Alpaca is pricey no matter where you purchase it. That's not really a bad price however. I've seen alpaca blankets run 200+.

Alpaca fiber is hypoallergenic so you won't have any smell unless you fail to let it dry after being wet. The stuff I have I just let air dry overnight. I don't have anything so thick it won't dry by...

http://watermarked.cutcaster.com/cutcaster-photo-800982111-Woven-Wool-Texture.jpg

If you look closely at the weave (this is but one style of weave) you will see tiny air pockets between the yarn....

There's nothing scientific about that. They give all the chicken mites inside the bag a life preserver.

Dry bags and pack covers. I actually don't mind hiking in the rain as long as it's not a torrential downpour. As long as you have the right clothing it's not bad.