if this is something you want to do, selling hand-made quilts, you have to start somewhere. you have to sell that first quilt, right?
i didn't see a size, but that beautiful hand quilting is remarkable. the design is original. i would honestly tell them that if it wins a ribbon, the price will be $950.00. sounds less than $1000.00 right? if not, than $$800.00.
see what the reaction is, i agree that you can always come down, but if she buys it, that's where your reputation comes from. and your price range is established.
try to sound firm when you tell her. if you waver, she'll know you're undecided on price and argue with you.
you can also tell her that she must leave a deposit, but part of the agreement is that you get to show it at the 4-state fair. if it wins that, she got a bargain.