Life is Beautiful is underway! Connecting Threads came through with a promise to replace the damaged fabric and insisted that they did not want the bad stuff back, so I'm cutting around the damage and using what I can.
The iron on transfer went beautifully and I've been having fun the last couple of evenings doing the stitching on the first block. I tried back stitching at first but found that I prefer the look of the stem stitch for most of the embroidery. The lettering will still have to be back stitching.