This was confirmed by Ed McAllen who told me in a recent conversation that he had to remove a log from a wall to install an electrical line. When Ed finally got the log out, the sawdust-lime insulation stayed in place and did not fall out of the cavity. It's texture was similar to beadboard. This sounds like a winner to me. There's plenty of sawdust available from sawmills in the area for little or no cost.
Lime is cheap too.
So, after deliberating all the factors, sawdust is the winner. Pine is a fairly airy wood, so the logs themselves should give about an R1.5 per inch. Sawdust is about R2 per inch. At this point, I am still considering using papercrete mortar for the exterior wall. If I can find a good, local source of paper pulp or if I'm ambitious enough to slurry newspapers, I'll probably stick with the above configuration.