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I have read that 301 can cause your SE rankings to drop. I cannot afford that.
I am thinking of if making bluewigets.com a completely different site. I'll let it sit around for a few months to get past the sandbox effect. And then slowly delete pages on the old website while adding the deleted pages to the new website. I will also be transferring the backlinks as I do this. What do you think?
I still believe that a 301 redirect would be best suited here - especially if you are concerned with keeping traffic up, sales up and no downtime. You can always purchase another domain for your new site idea, unless of course the domain name is that good. Otherwise, you have months of waiting before you can do anything with either domain.