Wool is great. As a maniacal knitter, I love the smell of wet wool (although much wool has no noticeable smell, as Forrest said). If you start to associate the smell with awesome bike rides, you might grow to like it.

Since wool can be expensive, make sure that you either buy wool that says "MOTHPROOF" or you store the wool, clean, in an airtight bag or tub any time you plan not to wear it for awhile. It can take more maintenance than synthetics when you do wash it, so try to get superwash or machine-washable wool and follow the laundering directions closely. I hang my wool sweaters to dry, clipping the bottom hem of each to a hanger so the shoulders don't deform.

While riding in the rain, I only put on a jacket if I need it to keep warm. I'm getting wet either way. (Full disclosure: I have not commuted for awhile, so riding in the rain isn't a workplace issue right now.) I have a Showers Pass jacket that I keep strapped on top of my rack trunk in all weather. There is a length of plastic in the hem of the jacket sleeve that holds the sleeve open so air can go through. If it's cold, you can close the scoop with a velcro strap. You might be able to arrange something like that in your jacket if it needs it. Mine doesn't work that well for me, though, because my arms are too short