Kaelin, if you are worried about the the smallness of the pendant or the length of the chain from the jewelry causing a choking or strangulation problem then educate the mother and if she feels that she still wants the items then consult a law professional on how to word the disclaimer for the commission contract. The lead testing portion of the CPSIA should be no problem, karated gold and sterling silver are exempt from the lead testing requirements since they are inert metals in the human body, the FDA has approved these materials for medical and dental use for years.
If you really feel that the child's jewelry will cause you more problems than the sale is worth simple tell the mom that children grow so fast that with a correctly sized piece for a 2 year old may only get a year of wear out of the piece before it's too small.
Here's the info I have on the Small Parts Regulations
Summary
http://www.cpsc.gov/BUSINFO/regsumsmallparts.pdf Small Parts labeling
http://www.cpsc.gov/BUSINFO/label.pdf Maybe some one else has a link to a plain english version of the small parts regulations, but these 2 links are the best I have.