Dye job

I bought some of Habu's raw silk- wrapped paper (N-24) a month or so ago from Loop. It was white, white, white. In some of these pictures (click to biggerize), you can see the fine silk threads.

I hardly ever wear anything plain and blindingly white, so I thought I'd dye it. After some advice from a few people at SnB and on the Knittyboard, I went with the safe and easy route and bought some Dylon from the Dublin Woollen Mills. The Dylon specifically said it would work for both linen and silk. So after a bath, I got this:

The colour on the picture on the left is closest to the true colour. When I first thought about dyeing it, I wanted a steely-blue-grey. Unfortunately, the Dylon choice of colours is less than vast, so I just went with #16 Slate Grey. Fortunately, it came out almost exactly as I'd wanted. The pictures show it a bit more blue than it really is. But the colour came out beautifully and evenly.

The problem is now: what am I going to do with it? It's like knitting with raffia (if your raffia was hand shredded by Japanese elves and then had silk lovingly wrapped around it by baby pixies) and I don't know if it will soften, although others have said other kinds of Habu linen does soften.

I've googled my little fingers off, but I can't find anyone who's done anything with this yarn, except for the Paper Bag, by Just Call Me Ruby for Knitty. The net-o-sphere and blogoweb have failed me this time. I'd really like to see some other examples of this yarn knitted up, so if anyone knows of any, please point me to it!