If I were you, I would put my entire store on sale and advertise wherever I could (think social networking - Facebook, google, blog, etc.) I would also consider sending a coupon to customers, although not to "favorite-ers".
Good luck with your sale and transition to selling patterns! Patterns are definitely easier, just send an email and you're done.
I don't have any input about your prices, because I'm not very familiar with items like yours. However, I also struggle with pricing my own items, so I understand your struggle! I'm constantly tweaking pictures and prices.