I finally found some! I found a tablet of newsprint-type paper at Office Depot, where the children's art paper is sold. The tablet called Doodle Pad came with 80 sheets, only problem is the paper was 9"x12". Using an office sized paper cutter I cut it down to 8-1/2"x11 to fit the printer. It was $2.99 per tablet
Next week I think I'm going to go a print shop and see if they can cut the whole tablet for me. They have those huge paper cutters that can cut a whole ream at one time so 80 sheets shouldn't be a problem.
I've tried 80lb printer paper and even using 1.5 stitch length, it was still hard to remove all the paper. The newsprint doesn't have quite the fiber content and weight as the printer paper so it should be alot easier to remove without affecting the stitching. And its more transparent than copy paper is so placement of the fabric should be easier too. Chris