I ordered my siding today! I bought 4" Eastern White Pine clapboard siding. 4" siding is actually 3-1/2 inches. With a 1" overlap, I will get the 2-1/2" exposure that I was looking for. The order came in at $610.50: by far the most expensive single order on the entire project. I don't think I am doing too badly if this is the most expensive item. As an added benefit, the siding is being milled only 3 miles from where the house will stand.
Check back in early June to see the siding installed!