If I'm building timber frame with green wood, will insulating the wet frame cause fungus growth? It seems this would hinder the breathing of the house...
I've had the same thoughts for my camp project. For a house though, code here requires an air exchanger, so that could help. Heritage Finishes makes an oil finish for timber frames and can add a fungicide to it. I believe Shelter Institute has it for sale on their website.
In my case, the my wood will have dried for probably 18 months before I raise it, just because it's probably going to take me that long to finish cutting it. I plan on having a solar fan and vent to removed some humidity.
It depends on how long the frame has to dry. Usually, by the time people get to insulation, it's had long enough so that the moisture as the surface is not sufficient to cause mold. Are you planning to oil the frame with Heritage Natural Finishes? It's an oil that dries, but also allows the wood to breathe.
Any other thoughts, suggestions or experience on this subject of using green wood for framing and enclosing the wall
Stick framing with green wood... I would prefer not to do it. If you do, you have to allow it to dry enough before insulating so as not to have moisture build up in cavities or staying in the framing wood. The moisture coming out of the wood needs to be able to escape properly. I prefer to have the timberframe as the structure holding the roof up and enclosing the rest of the envelope with stick framing (or whatever you prefer).
Once it at equilibrium moisture content I've had no issues using rough sawed, air dried wood in stick building. Powder post needs to be treated for beforehand though.