I'm fairly certain that last one was directed at the wetsuit outfit, so Ra'mon scraps it entirely. This means he needs to create something else, and fast, while Mitchell just basically does nothing. Ra'mon complains that working on two garments at once in unfair and that he's trying to keep Mitchell as focused as possible. There's some doubt whether they'll have an outfit to walk down the runway, but in typical "Project Runway" fashion (unintentional pun there), no one walks down the catwalk sans clothes.
We meet our guest judges, Max Azria of BCBGMaxAzria (hello, Max, I just dropped way too much money at your store the other day for some amazing dresses) and the aforementioned Rachel Bilson, formerly of The O.C. I'm more excited about the judges than the dresses. Sigh.