Elaine, The first dyed fiber I worked with was a merino/silk blend from a place here in Ohio called Tuscan Grove. I got it all spun up without it coming off in my hands, but when I went to wash it, it bled like crazy. I rinsed it several times and it was still bleeding. They must have used way too much dye in the bath for it not to exhaust any better than that.
I just recently dyed yarn, fiber and knitted items with KP asid dyes Red and Blue neither ran much when I washed it or got on my hands. I think Peggy is right about too much dye. I just kept adding fiber until all the color was taken up by the fiber. You might try soaking in vinegar to set the color. I did a dark blue and white color work stocking and kp said to soak in vinegar and I never had bleeding problems after that.
There's a lot of information on the internet about dyeing with Koolaid. I was experimenting and got lucky. It's fun to do, though, the process isn't difficult, and the dye is permanent. My socks have survived many washings in the machine. It's a nice way to go if you don't know whether you want to do much dyeing. You can always switch to acid dyes later.
I know everyone has been busy. I finally got some pictures of some of the wool I spun and knitted up. I guess I over spun them. The first one knitted up ok but the second one kept knitting sideways, I knitted it in kp and garter and it worked up ok except that my dps were too small when I switched over to them for the decreasing. I guess I will fix that later.