I've been playing with some Misti Alpaca of the Super Chunky variety.... working on a scarf/cowl sorta idea, with short rows. (I think I'll call it a Scowl since by the time it's cold enough to need a giant cowl, that's what I'll be wearing on my face.)
After three or four hours of on-and-off knitting, and wrapping the piece around my face and neck, I noticed that my eyes were itchy, and there was some redness on my cheek.
This disturbs me no end.
The yarn is a 50/50 wool and alpaca blend. It doesn't seem very sheddy, but I did feel like there were little hairs coming off it as I worked.
If I have to choose, I'd rather be allergic to Alpaca than wool, but it's not a choice I want to have to make.
I spent half an hour or so with it a couple of days later, and nothing untoward seemed to happen, but I am a still a bit worried.