Do you know anyone with an embroidery machine? Or maybe the local quilt store can embroider the blocks for you or know someone who will.
Also, have you thought about fabric ink? Tape the design/Initial you want to a window then the fabric over it and use a fabric ink pen to draw in the design. Remember to heat set it afterwards by placing a paper towel over the fabric and using a hot iron (no steam) and the paper towel will absorb excess ink. Also, you need to heat set between colors.
Have any artists in the family? Maybe they could draw the letters the size you want. If not, a word processing program will have letters in different fonts/styles and you can enlarge them to just about any size you want.