I've worked in two colours before, but I'm a tight knitter so not great at it. Working with five colours would be... Yikes! I can easily understand the twisting and tangling must be a nightmare. I think I'd put each ball in a separate bag with the handles tied so they wouldn't bounce around and tangle together, then just try to set them out in a row and move them as necessary each row. Fiddly, but maybe it would save having to keep getting them untangled.
smallhobbit knits picture sweaters so she might have some better ideas. I cheat and stitch the pictures on afterwards, that wouldn't help you though. I do love the idea of your stripy scarf though! What colours are you using?
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I've worked in two colours before, but I'm a tight knitter so not great at it. Working with five colours would be... Yikes! I can easily understand the twisting and tangling must be a nightmare. I think I'd put each ball in a separate bag with the handles tied so they wouldn't bounce around and tangle together, then just try to set them out in a row and move them as necessary each row. Fiddly, but maybe it would save having to keep getting them untangled.