There are a number of art stores in santiago - it depends on what you're looking for though. Yarn you can get at la mercería alegría on calle broker between San Luis and España in the city. You can get all kinds of crafting goods though. If you're looking for paint and canvas, there is a store on the corner of Calle de sol in front of Colon park (where the Altagracia church is) I am not sure what it's called. It it's obvious from the outside that it is an art store.
I can't say for sure as I've not been there in about 2 years, but, they do have a large selection of many items. If not in stock they could probably get their hands on it for you.
Cobraboy, you can get twine at any of the craft stores in the city. It's a common material.
The store I mentioned on Calle del Sol is La Miscelanea. THere's also la merceria la alegria on Beller, and Rosy on ... Espana, between sol and beller.