the problem with hardware store chains is that they can be cut with bolt cutters. krypto's are hardened, squared off links which are a lot harder to cut. that being said, any lock is just buying you time. if someone really wants to steal your bike they will.

as far as sleeves, a lot of people make their own. any tough fabric should do the trick, or if you're super lazy you could just cut the sleeve off a long sleeve sweat shirt. these guys make a production version with some reflective material, but i've heard complaints about durability...