The reason I started thinking about wool as an undercover is because I just used a wool blanket as an undercover last night. A fog rolled in, and there was a lot of dew, and it began settling on my UQ. I hung the wool blanket from the hammock ridgeline and voila! The down UQ stayed dry as did the hammock.
Unfortunately, a wool army blanket weighs a ton, which is why I thought I could get the same weather protection from lighter wool/denser weave like is used to make men's suits. Wool is not going to be windproof, but if you lanolinize it, I think it would keep you pretty dry.
MacEntyre has canvas hammock socks for cold-weather camping that weigh 4 oz. per yard (29 oz. total). Couldn't you make the same thing with wool? Surely they make wool that is lighter than 4 oz per yard.
And I'm strictly thinking about the weatherproofing capabilities of wool. The insulative properties are a bonus. I don't know if anyone has ever worn a wool sweater out in a snowstorm (I'm stupid that way), but the outer layer can be blanketed in snow and you don't even get wet. The moisture stays on the surface and doesn't penetrate.