Any electrical shop that rewinds electric motors will have a wide variety of fiberglass sleeving. You might find a size that will slip over your pipework, or just wrap your pipe to simulate asbestos lagging. If you wrap on more than one layer for thicker insulation, you might find it helpful to alternate directions, left to right. The overlapping helix in the opposite direction to the first helps keep it from unraveling, and it won't tend to "bunch" as much when you have to lag around a bend. Whip the ends right up close to a fitting after wrapping your pipe work, and you can trim off the excess sleeving with a sharp knife close to the whipping. Now you can get union nuts and such undone with out disturbing the lagging.
Look at the uncoated sleeving here
http://www.varflex.com/index.html for example. No interest in this company, I just remembered their name from some of the spools at the shop!
The stuff isn't as cheap as cotton, but is practically impervious to heat, moisture, mildew, rot etc, and is fairly abrasion resistant too. You can finish it with paint, mud, varnish or what-have-you, but keep in mind that the air between the fibers is your insulation. Try not to saturate the stuff, just coat the outside.
DJD