I just realised I never blogged about what I did with this woolly gorgeousness. It became a mini-Clapotis.
I did one increase section and then about 12 repeats of the straight section, using 8mm needles.
The wool bled loads when I washed it and it really softened up. It's still a little scratchy, but it's OK round my neck over a jumper.
This picture shows the colour change from one skein to the other. I didn't alternate skeins - too fiddly and it makes it harder to judge how many straight section repeats to do - and I quite like the result. It shows off the randomness of the hand-dying process. You can also see the fuzziness round each stitch in this picture. I think it'll continue to soften up as I wear it and wash it.