Maybe you can apologize for your lateness, give them something 'bought' and tell them you're working on their quilt. You'll probably never hear about it again as they wanted something you had to buy anyway, by then maybe the quilt will have [choose an ending your conscience will let you live with].
Personally, I would finish it, give it, and keep my head held high.
Some people just want things which had to be bought, the dollars giving the value. Maybe the next time you visit, leave a little scrap printed from Etsy with some quilt ads with prices.
Good luck with it and welcome!