Decided to go with the sheepskin. It has the advantage of giving me experience working with real leather. It ended up not saving me any money - once I got to IKEA, I saw that the sheepskins could vary significantly in size and shape (which should have been a 'duh' but there you go). So rather than hope that I picked one that matched mine at home, I bought a set.
Which are slightly too short for the lyre, it turns out. I'll either use the scraps or my old skin to make a flap over the top, I think.
I traced around the lyre (on the skin side) with a pencil, then put the skin fur-side down on the top (bumpy - has the tuning pegs and strings) side of the lyre, to see how much additional was needed to wrap around the edges. With the wool adding fluff, it looked to be about an inch.
I used a knife to cut from the skin side. I eyeballed the first skin, then used it as a pattern on the second skin. It would have been smarter to find a compass and actually expand the lyre tracing out by an inch on all sides, or make a paper pattern, or something. I think I got away with it, but it was sloppy.
I dug out my waxed linen thread from Tandy and an assortment of leatherworking needles. The needles with the diamond cross-sections that cut the leather? Didn't really work. So I dug out the awl. That worked. I reached for a needle that was stuck through a bit of chamois on my sewing kit - maybe from the 2009 embroidered leather game board project? it was threaded with the right wool - to guide the thread through the awl-hole. Then I discovered that the needle would go right through the leather fine on its own. I just need to use pliers to pull it all the way out.
Trying to stuff all the wool into the body of the bag is an ongoing thing. I got to thinking there was too much wool at the seam and started clipping it, which made it harder to keep the fibers inside the seam. Once I had a bit of seam (and some binder clips), I held my breath and put the lyre in - fit! About an inch of space at the bottom, which I attributed to a giant pad of wool, so I turned the bag inside out to trim it down a bit. In retrospect, that was probably just the peg for the tailpiece. Whoops.
I'm using a blanket stitch, about 1/8" from the edges and about 1/8" - 3/16" apart. I think I saw that suggested on some "make your own shearling coat" site? Most historical leatherworking websites assume leather, not fur - I'm not really sure how saddle stitching, for instance, would work in this case. I guess I could shave the hide around the edges?
I had some reservations about putting the seam right at the bottom - if I'd used a folded piece of hide for the bottom, and then butted two pieces to lengthen it on either side, I'd have two seams to divide the weight of the lyre instead of one. But then I picked up the lyre and remembered that the thing weighs maybe... half a pound? At worst, I should maybe reinforce the center bottom, because that tailpiece peg is going to concentrate all that force at one spot.
I think I'll order that BORG Mora weaving wool Mistress Brianna mentioned and tablet weave a carrying strap, and whatever strap(s) are needed to tie down the top flap.