This seems very interesting about Our Stories. Maybe I'll try that, but the problem is they charge 135 dollars for one story, not 35, as said above, which is cheap, I know, compared to other places you can go for a workshop, but still, for me it is kind of impossible right now...
They actually do have a $35 package (thank god! because otherwise I'd never be able to afford it), it's just more hidden, at the bottom of this page: http://ourstories.us/...shops/workshops.html
Scroll all the way down. It only includes one workshop, so you don't get to keep sending it back and forth, but that's all I can afford right now. I'll let you know how mine goes!
As far as the third person debate, I can see the merits of sending in something different, but I would not stress out about it *at all* if your stories aren't. I'm applying for creative nonfiction, so it's a different ballgame, but I would imagine that just whipping out a new story or re-imagining an older first person story into third person would be a) so much more work and b) possibly detrimental.