Asking you to pay for dry cleaning?! ***?
A requirement of goods in commercial law is that they be of 'merchantable quality' under the Sale of Goods Act - which this certainly is not, and there is an implied term that this dress corresspond to the sample you tried on (or in this case your actual dress). Breach of this term results in your statutory right to repair or replace (to do so at the seller's expense) OR to rescind the contract under EC Directive 1999/44. You do NOT under any circumstances have to take faulty goods.
An oral contract may be legally binding - however, due to the above, it sounds like it's her problem. Did she make it clear her cancellation policy when you bought it over the phone? If she did send you any T&Cs AFTER making the verbal contract with you over the phone then any of these requiring you to pay the full amount if cancelling would be null and void, as you simply can't introduce new terms to a contract after making the contract.
I'm afraid my contract is a little rusty - but I just took a commercial exam on Thursday - on buyer's remedies actually! Further I would ask your Professor for some advice

Best of luck!!