I've Got This Wild Hair

For a sarong for the Mexico trip to knit. But, now, with the help of some knitlisters I am thinking about a lace ponch ala Meg's Mananita, knit back and forth instead of in the round.

Or a variation of a collar only longer like a skirt that can be buttoned up on the side.

Only the yarn would have to be cotton, right? And a light weight one (read as not bulky to pack) right? And if I use a cotton, wouldn't it need to be blocked when finished?

Any suggestions on yarn brands? I know it isn't do able for this trip, but wouldn't it make a great project to work on at the beach?