Kramer actually lists, or did list, an IWB holster with lambswool on the side facing the body, so the idea certainly has merit. I would think a trial period, with the lambswool attached to an undershirt, to be best, before modifying the holster.
Probably, a pad that is larger than the entire holster, could be attached to the belt past the holster's attachment points?
How thick of padding are we talking about? 3/4"? If so, maybe something like this https://www.skydex.com/store/200394 - the circular center helmet pad might do the trick.
Also - when you're not feeling well, and tired from a long trip - you're more likely to notice the small irritations that might be considered "normal" and blow them completely out of proportion.
I would suggest having a custom holster made - or getting a cheaper version of a similar design - and then modifying that. If you like it, great, sell the VM2. If not, oh well - suck it up! Your VM2 is worth $$ - especially since you are a Moderator and all....
The best padding I've found is the backing N82 uses on their holsters (thin layer of neoprene sandwiched between soft leather and suede): Patented Design « Super comfy.
I'll be interested to hear how the sheepskin turns out for you. I've looked at Kramer's sheepskin IWB holster (Inside Waistband Holsters - IWB Holster) but haven't tried one due to the price.