Here's where we stayed. It's called The Inn at Montpelier. Built in 1828 and lovingly maintained throughout the years, it is the best place to stay when in town. If the rooms and delicious (free) breakfast don't grab you, maybe an evening drinking gin and tonic on the veranda will do the trick. It certainly did for us.
They have an ENTIRE section (shelves 6' x 6') locally produced yarns. That's what I was looking for. I settled for these two lovelies.
I was really impressed at the number of fibre artists that were featured in this section. It may not be local in the sense of my "100 miles" but for that part of the world, it certainly was. And I bought them. I wanted to buy more, and there were lots to tempt me. Wonderful colours and textures -- mohair seems to be a popular blend with wool. Not much alpaca and llama. That doesn't mean they don't raise them in Vermont, it just means I didn't see much local camelid breeds in this particular store.
The moral of this story is: where ever you travel, support the local industries. Especially the cottage industries. That's where all the big ones started.