Last winter I bought about 4 lbs of low grade alpaca and llama fleece to learn how to spin using a drop spindle. I now have lots of yarn (which I dyed using koolaid which was a hoot) that I’m a bit hesitant to throw away.
To be sure, it could never be used against the skin. Too many guard hairs. So I am looking for ideas of what to do with it, and maybe even some pattern suggestions.
Be my muses! 
I tend to take yarn that I can’t personally wear and make hats for charity, shelters and such. That yarn would be incredibly warm.
If you want to use it yourself, but can’t wear it around your neck consider mittens or hat that you line so it’s not itchy.
You could felt it, or use it in an outer wear garment. It may also soften up a lot with washing a couple times too, or put hair conditioner in the water.
You could also use it to make rugs, pillows, or other home decor items.
Would this be of any help? How to soften scratchy yarn…
http://agirlandherneedle.blogspot.com/2012/03/soften-scratchy-yarn.html
Some yarns and types of yarns will still remain scratchy to some people no matter what you do. Those short guard hairs on wool are awful for people like me with very sensitive skin. Even some cashmere is unwearable for me. 
Yeah, I tried everything to soften this wool! Unfortunately it just has a short staple length and is full of guard hairs. And honestly, it’s not really spun all that well since this was my learning yarn - it’s inconsistent and stuff. Not that the right pattern and dye wouldn’t cover it up, but I might as well just use this stuff on a fast/easy project than do something more thoughtful with it.
Thanks for all the ideas 
Need any felted purses or other not-against-your-skin gear? I can’t use wool wearables AT ALL, but I can use purses, iPod cozies, glasses cases and the like.