So we took a trip to the fabric store where I allowed her to pick the fabric of her choice and I told her I would give "Blankie" a makeover.
After about an hour of looking through the fabric section she finally settled on the fabric of her choice. We then went home and I sewed the rest of the afternoon giving this loved blanket a much needed makeover. She was just delighted with the outcome and is thrilled knowing that her new Blankie is also her old "Blankie"!