I'm a big fan of wool (the real stuff, with the lanolin still in it). We use it for diaper covers and for crib/bed pads. It's natural, anti-bacterial, absorbs well, and is generally a miracle product (check out this article for a better explanation).
JP priced out the insulation -- it's £117 per 20 square meters (which is around $215 for 65 sq.ft.) I can't even begin to guess how much we'd need, but I'm assuming it's more expensive than the fiberglass-don't-breathe-or-touch-it stuff. Still, we're asking JD and co. to look into it.