I made a nice hat out of 100% baby alpaca, but it's a little big for me. I've already decided it's way too much work to undo it and reknit it. I've been trying to shrink it. I hand washed it in warm water, agitating it slightly, and that did nothing. Then I did the same thing, agitating it more. Still nothing. So I got a wash bag and put it in the washer on gentle cycle in hot water. It's still the same size. I know that all these techniques shrink wool...but does alpaca just not shrink? Or does anyone have any other suggestions?

Alpaca does felt it just takes a lot more work to make it work. Try regular wash cycle hot water and check often.  I learned this the hard way and then read it.  of course.