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I would un-stuff the head, turn it wrong-side-out again, and re-stitch/reinforce the seams. You could then try some fray-check to strengthen the seam allowance.
If that doesn't do it, I'd move on to the next head. The combination of fabric and seam needs to be strong enough to handle a firmly stuffed nose, I'd say.
Becky
You're in luck! Our site sponsor, Intercal Mohair, is located in CA.
We'd love to see some of the memorial bears when you're done!
Becky
Like you, I save scraps of fur (mohair mostly) in a bag, and if I'm making a larger bear, I'll often mix in bits of the leftovers with the polyester - at least in the body. (It's nice to include a larger scrap or two of the bear's own fabric in case someone in the future needs to replace an ear or something.)
For the head and limbs, though, I want more control during the filling process, so I would only use leftovers in the body. It does give a nice weight and warmth to the bear, and you're right--it's less material that gets thrown away.
Becky
I don't use ebay either, though some people do well there.
I think you'll like Bearpile (gets a lot of the right kind of views), and there's a nice community behind it. And you're right that less expensive items are likely to do better on etsy - things you can update frequently, or things you're not in any hurry to sell.
Do you have a facebook page? And/or a website or blog?
Becky
I think it's difficult for collectors to find your bears on etsy, but if you have a good mailing list, blog, Facebook presence or other way to send people there, it could be a convenient photo gallery and checkout system for you to use. (They do take a percentage of your sale, and of course you pay another percentage to PayPal as well.) That's my two cents.
Becky
The backing fabric for faux fur really varies, from stretchy knits that you should most probably line, to nicely woven fabric that is as stable as mohair backing - and several variations in between. If you're having trouble with fraying, your idea of treating the edges with fray stop sounds like a good one.
It also took me some time to get used to working with faux (and one near disaster when I wanted to re-open a leg and couldn't locate the seam), but I've developed a pretty good relationship with it now. 
As you say, it's wonderful for scissor-sculpting, and so, so soft.
Becky
