I have found some wonderful info on Dlhunicorns site about lice and mites and using seven dust.
If you search for lice at top of menu there is also lots of info there as well.
I see what you mean with dampness.
Perhaps a mix of hay and pine shavings will be fine.
Mine have hay in their boxes but i have pine mixed in with it.
Good luck.
Thanks everyone for all the info. I just recently discovered lice on one of my chickens..but, I did it the hard way. She is setting right now and I put an egg to my ear to listen for peeps....Here's what I've learned....... chicken lice will transfer to humans (& horses ..by contact only but, thats all) So after I stopped being grossed out, I got to treat me, my house & the whole 5 coops! Sevin appears to be the poison of choice for the coops most readily available (Im still looking for DE) but doesn't seem to come in large bags anymore. Got rid of all the current bedding and replaced after dusting coop. Dog Flea shampoo should work if the poison ingredient is pyrethrums, safe for chickens, but, very short residual effect, will need to dust afterwards also. According to all my research the Sevin will last, if it doesn't get wet, for about 5 - 10 days. It will not kill the eggs which take 7 - 10 days to hatch so, retreat once a week for two or three total treatments. Putting Sevin in their dust holes at least once a month for maintenance is a great idea. Near as I can tell, we got them from the wild birds that are just about imposable to keep out of the pens. Did you know sparrow will burrow! I had to bury wire around the bases of the coops and they still get in!
For me and the house I went with RID which comes with spray for non washables like mattresses. I've just learned that teatree oil is good also and have added a bottle to my shampoo since the RID makes me sick. The experts say if the lice are not on a host for two days, they die so I hung my pillows and mattress pads and comforters out in the sun for at least 5 daym, maybe longer to take eggs into copnsideration. Hoping that works! Everything else got washed in HOT water and dried on high and I put eucalyptus leaves between my mattress and box springs. Dont know if that will help but, at least it doesnt make me sick like the poisons do. So far, so good, ..at least in the house. As for the chickens .well see. Wish me luck!