Update: I seem to have (at least for now) fixed the problem. I found on the slice FAQ thread (after lots of reading!) this suggestion:
" If you have access to a sewing machine lubricant, a gentle machine oil, or WD-40 you can fix this problem. In the blade housing unit there are two small holes with two lines in between. All you need to do is put a small drop into one of the holes on the bottom of the blade housing. Don't use too much, as more than a small amount can damage the machine. Let the machine sit for a moment, then turn it over and perform a test cut. Some lubricant may appear on the inside wall of the Slice, just wipe that away so it doesn't drip. If it still doesn't cut through on your test cut, let it sit for a moment longer and then try again. This should clear the problem right up."
I had my husband do this with some WD-40, then I plugged in the Slice and homed it while it was plugged in and the blade snapped right back up into place. I cut a design and it worked properly! I think the combination of the two solved my problem. (Again, at least for now. Hopefully it keeps working).
I had charged the unit for about 10 hours last night before trying it out so I'm not sure why plugging it in helped. But even if I have to use the unit plugged in, I don't really care. I don't need it to be cordless.
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