Haven't looked at your project, but I LIKE the idea of cloth as hair, I even tried it once in the past... using thin cloth strips to make a sort of 'mop-top' and then decalling them with a hair texture- never got what I wanted and gave up. After my RECENT experiments(shameless plug http://www.youtube.com/user/campydoodles#p/a/u/0/UdUVO9K2Avs ) I've learned that you need to approach the cloth feature with respect...there is a lot it can and cannot do... a lot of people think it is an easy feature once you get the magic settings and it is not. Each action or scenario needs different setups... you will need to dink with your keyframes once simulated... you will need to know how to combine keyframes from different simulations... mainly, you need to learn to think around the setbacks to accomplish what you need to see.