Is £10 too expensive? They no longer stock the red sleeve I bought, but I think this one is exactly the same apart from the colour:
E-volve reversible neoprene sleeve case cover for ebook e-reader / tablet computer
It's thicker than the cheaper sleeves (1cm thick on it's own), it's slightly bigger than the Kindle 3 (approx 1cm each side). I have my Kindle in a silicon skin and I can still use it, though it makes it a bit neater, without the skin it slides in and out very easily.