Here are some suggestions of my top yarn shops in Seattle:
So Much Yarn
This is my all time favorite yarn shop. First of all, the location in the Pike Place Market can't be beat. It is on the First Avenue side of the Market down the hallway past the ice cream shop. The yarn selection is reasonable, colorful and well organized - by size!
If you are looking for a little adventure in your yarn shopping, take the ferry to Bainbridge Island and head to Churchmouse. They have a selection of lovely yarns and wonderful patterns