Here's one hanky laid out on plastic wrap, painted, and ready to be rolled up in the plastic for steaming. I painted the entire three ounces, one at a time, each rolled up in plastic, and laid each one as it was finished in an old vegetable steamer I use for setting dyes.
After they're steamed for 20 minutes, and after cooling, I unwrap all and rinse in tepid water, squeeze each one out, and lay them staggered on a terry towel. I make a second layer of the same thing, then roll the towel up tightly to blot out excess water. Then I hang them to dry. Today was beautiful, so I hung them outside, out of the direct sun. On cool damp days I hang them inside to catch the heat from my heater.
When they're fully dry, I stack the hankies in such a way that the color variations are spread throughout the whole stack -- i.e., the painted hankies have different amounts of each color on them so I make sure those variations are spread out so that one section of the subsequent yarn will not be significantly different in color from the rest.
How I spin them is that I will take the first hanky off the top of the stack, peel off one cocoon layer to spin, then put the rest of that hanky at the bottom of the stack. This way I'll get one layer from each hanky, one at a time, so the colors are rotated throughout the whole spinning project.
I have a few bags of hankies and caps left at my Etsy store, and I probably won't be ordering any more for a while. Go there now if you're interested in picking up what's left and giving this wonderful and fun process a try.