I feel your pain. Homespun is not my friend either. But, I have designed a pattern that uses that yarn, and it's not so bad to work with.
I hold it together with two strands of Bernat Baby Coordinates and make a simple baby blanket. It's easy to knit with that way, and doesn't hurt my hands at all! The blanket turns out so cushy and soft! My granddaughter claimed it right away!
I used "Homespun Baby" yarn, which is exactly like the regular Homespun.
Here's the pattern:
Sandy's Cushy Baby Blanket
Size 19 (36 inch long) circular needles
Lion Brand Baby Homespun (2 skeins)
(or 1 skein regular Homespun yarn)
Bernat Baby Coordinates (2 skeins - same color or two different colors)
(Hold 1 strand Homespun and 2 strands Baby Coordinates together throughout):
Cast on 4 sts
K2, KFB (knit front and back in same stitch), Knit remaining sts
Rpt last row until sides measure 36 inches
(or until you use 1 skein of Homespun Baby)
K2, K2tog, Knit remaining sts
Rpt last row until 4 sts remain