Archie McPhee - If you look beyond the packaged toys this store has a ton of salvaged materials spilling out of bins and 50 gallon drums. Medical supplies and vintage rubber toys are the most prominent but if you spend some time poking around you will find the box full of old patches which are just waiting to be used in an Ironic Hipster way. Be sure to head to the adjacent building for the larger items Archie McPhee has to offer, including some vinyls and fabrics.
Display & Costume While at first glance this seems like an average costume and party supply store I have consistently found myself wandering the aisles dedicated to display finding dozens of solutions for things I'd like to do. They have some giant styrafoam shapes I'd determined to use somehow. They are my reliable source for adhesives, hooks and gaffers tape that I need right away. The costume section has a lot of fabrics and trims which lean heavily towards the novelty, but they are a good place to find plastic jewels and forms for headdresses.
Trophy Cupcake - They have jars of vintage cupcake toppers and reproduction vintage tin badges, not a large amount but they are charming treasures. Also, some of the best cupcakes in town.
the big Goodwill - This is a large Goodwill store covering two warehouse spaces, I never fail to find something exciting. If you're brave you can also check out the Goodwill outlet.
Joanns - This Joanns in Ballard is one of the smaller old school locations with all the strange candy and awkward charm you expect.
Papers and Packaging
Packaging Specialties - I've never found a more complete collection of boxes, tissue, ribbons and papers. They carry the sometimes-elusive Altoids style tins, small paint cans and paper ice cream cartons.
Paper Source - A very nice shop offering paper, bookbinding supplies, stationary goods, and a collection of scrapbooking supplies that doesn't make me cringe. It's across the water in Bellevue but if you have the time it can be worth the trip.
Paper Zone - A good collection of decorative papers and stationary papers, scrapbooking supplies, art supplies and embossing tools. They have some interesting packaging options as well.
Stitches - A fantastic fabric store that offers yarn and notions. It's not as big as some but the selection of fabrics is excellently curated. Last time I was there they has some droolworthy Japanese prints.
Nancys - A large independent fabric store with nearly anything you would need for dressmaking. They have a ribbon room in the back that you must take a look at. If you look carefully you can find designer leftovers and a good selection of wool felt by the yard.
The Quilting Loft - A tidy quilting store that carries all the Amy Butler and Free Spirit you could wish for.
Weaving Works - A large shop offering yarns and tools for knitters as well as roving, raw fleece, dying supplies and spinning wheels to people who want to make their own yarn.
Hilltop - A cozy shop in a Craftsman style house with a good selection of yarns and books. They are generous with advice.
Acorn Street - A shop filled to the top with great yarns. Last time I was there they had many sizes of tiny 12 inch bamboo circulars I regret not buying.
So Much Yarn - This shop is the closest one to Schmancy and has a great selection of yarns and tools.
Full Circle - This is a smaller shop with an eclectic selection of yarn, much of it bought as odd lots so you can find good stuff at really great prices as well as some yarns that have been discontinued.
Home Cake Decorating Supply Co. - This is a small and charmingly crowded family owned cake decorating supply place that has never failed to have exactly what I want. A staggeringly complete selection of cake pans, decorating tips, sprinkles and chocolate molds. The owner is very generous with expertise when she has the time to offer it, and has a stack of magazines and books you can page through for inspiration.
Cookies in Ballard - A small shop dedicated to cookie making supplies. They have sprinkles, icings, cookie cutters and dough scoops galore along with a lot of inspiration.
Zenith - They offer a good selection of what you need to make your own soap, lotion, candles and perfumes, including loose bulk herbs and measure-your-own oils. They have bins full of hard to find lip balm and small perfume containers.
MacPhearson Leather Company - A cheerfully worn warehouse shop full of leather, tools and kits. Not for vegetarians.
If you can only make one trip go here:
Ballard neighborhood - Archie McPhee, Cookies, Joanns, The Quilting Loft, and Full Circle yarns are all within walking distance of one another. You must stop at Cupcake Royale for fortification and some really good coffee.
Queen Anne neighborhood - Nancy's Sewing Basket and Hilltop Yarns face each other across the street. Half a block down is an intersection where a Starbucks, Peet's and Tully's face each other from respective corners, though I highly recommend taking a walk a few blocks further to get a Cafe Con Leche Cuban Style and Cuban Toast at El Diablo Coffee Company.
Thanks so much to Megan for your wonderful insight.