I found a couple of interesting papers on cloth simulation, and was wondering if you guys had read these, or could use them somehow. They're a bit out of my league unfortunately, so I couldn't really understand too much of it, but the videos look promising.
Efficient Simulation of Inextensible Cloth
Multi-Resolution Cloth Simulation
Really looking forward to the future of cloth simulation by the way, it's something I'm really interested in using for my games. Good luck!