I have had great success with gifting sweaters knit out of Berroco Vintage DK to non-knitters, and no one has yet destroyed them by putting them through the wash. The yarn does need to be laid flat to dry, though. It comes in three weights (DK, Worsted and Chunky). They also have a new super wash Wool (UltraWool) that I've worked with and like just fine, and I understand it is bullet proof in the super wash department. Neither the Vintage or the UltraWool come across as unnatural.
And IMO green is a lovely color for ungendered baby gifts. But I like green all the time.