It's very hard to find. However, it may help to expand and also narrow your search parameters. These days, "Egyptian Cotton" means nothing more than that it came from Egypt. It may be the extra-long-staple, tightly woven stuff you're looking for (which isn't even native to Egypt, by the way) or it may be plain old regular cotton that won't do the job. They can both be labeled and marketed as Egyptian Cotton, and the high-quality stuff that you are looking for is actually a pretty minor percentage of what's sold as E.C.
Rather than re-type it, this is an exerpt from a thread I started last year on the WoodenBoat Forum about building a couple of cotton sails and the technical information I found on the various fabrics during a pretty extensive search for suitable cloth. Extra Long Staple (ELS) cotton means that the plants produce unusually long fibers, which can then be spun into very strong, thin yarns and woven into very tight, fine weaves - exactly what we would be looking for when making a sail, or for a project like skinning a canoe. I still have not found a source, but luckily, the few sails I've built from it were small and divided into small panels which could be had by chopping up some carefully selected and very expensive bed sheets. I don't have a source for a canoe-sized hunk, but hope this will help you keep track of what you're looking for.
"My hunt for a retail source for small quantities of good cloth by the yard continues, and I'm still coming up dry but I'm learning a lot about cotton. I had always assumed that Egyptian cotton probably dated back many centuries, but found out that it's not all that old. The plant that started the super-high-quality cotton industry actually came from the Bahamas. In 1825 "Sea Island Cotton", with it's unusually long fibers (E.L.S. or Extra Long Staple) was exported to Egypt and cross-bred with Jumel, an Egyptian tree cotton. Through various genetic experiments, the high-quality ELS Egyptian cotton was developed. Interestingly, the standards for labeling cotton dictate that any cotton grown in Egypt can be labeled "Egyptian Cotton", whether it's ELS or something of lesser quality, so let the buyer beware. I read that currently only about 7% of the cotton coming out of Egypt is actually ELS cotton. This probably explains the existance of Egyptian cotton sheets with a thredcount as low as 200 (which isn't very good) at what seem to be bargain prices.
In 1908, one of the Egyptian/Sea Island hybrids was introduced to the American southwest. It was originally called American/Egyptian cotton, and later named "Pima Cotton" as members of the Pima Indian tribe were helping to grow it on a USDA experimental farm in Arizona. With a proper threadcount, there is no reason that Pima cotton wouldn't make a sail just as good as a top of the line Egyptian cotton.....or possibly even better. Enter "Supima Cotton".
Supima is as much an organization as a product. In 1954, the Pima Cotton folks got together and formed guidelines for the gold standard of their product, in an effort to guarantee the highest quality possible. The fibers were ELS Pima, with a minimum length requirement and they had to be processed with roller gins, rather than chopped in order to maintain the long silky fibers for weaving the best cloth. A product that carries a Supima hang tag is pretty much as high as you can go on the cotton quality scale, on any continent (and here in the USA, it won't have the import duty that Egyptian Cotton will likely have, however Supima yarn is also exported and sometimes woven offshore). As always for our purposes, the trick seems to be finding some without having to deal with a mill and buy a truckload of the stuff.
For dinghy sails, we also need to consider the weaving. Ideally, we want the strongest, tightest weave we can get, and that's generally the good old over/under/over/under with single-ply yarn. Fabric woven this way is often called "Percale", though that just denotes the weave. The type and quality of the fibers in it (cotton, ELS Cotton, polyester or a blend) will vary, so you have to check it. As mentioned above, a lot of high-quality sheets are a Sateen weave, which is rather shiny and slick on one side (Granny's underwear). This is done by using a weave where one yarn crosses four yarns, rather than one-to-one on Percale, and that longer uninterrupted expanse of the four yarns is what generates the shiny finish. What it doesn't generate is equal strength and stability as sailcloth, so we would really rather have a high-quality Percale with a threadcount or 400-500 minimum and single-ply yarns. You will also find fabrics woven with two plys (doubled yarns - 2 by 2, rather than one-to-one) and I get the feeling that they may often double the threadcount to make it sound more impressive than it actually is. The yarns may be there, but the weave isn't as tight as the one-to-one would be.
So ELS Egyptian or Supima cotton, in a plain, Percale weave, single ply with a high threadcount in a natural cotton color is the goal for cotton dinghy sails (or lightweight canoe covering). All we have to do is find some....... "