However, here's what happens in the wool dyeing process:
Step 1: Washing the wool...along with the lanolin, there are a lot of impurities in the wool like dirt, soil and even sheep feces (sorry...but it's a big issue!) The wool needs to be bathed in hot water and detergent to remove these impurities and to allow the dye to absorb well into the fiber. This process strips off a large percentage of the lanolin content in the wool.
Step 2: Dyeing the wool...this process totally removes the lanolin content in the wool. For the wool fibers to absorb the dyes, the water needs to be boiled consistently over 100 degrees. Lanolin melts at temperatures ranging from 40 to 50 degrees and thus at this stage, the lanolin dissolves into the hot water.
LESSON: Don't believe those rug dealers that tell you that their dyed wool rugs have lanolin that helps to repel stains. This would only be possible if the lanolin was massaged BACK into the wool rug once the rug was finished and washed... think of it like putting conditioner on your hair after shampooing.