What did the 850 free users say about the app? If only a dozen people bought licenses, then something must be wrong. My app didn't really sell well in the first two years either -- it took a lot of changes until it was actually something that people wanted to buy, and I had to throw out some of my favorite features because folks just didn't understand them.

Just from reading your post, I suspect the app is too specific for your workflow and not generic enough that people can use it if they have a slightly different workflow.