Giving in is really the only way to handle this. I understand your frustration completely, as I have a 6-year-old ds doing the same thing; it has been going on for almost a year now. I totally understand how irritating it is, and how you can get to the end of your rope when you have spent hundreds of dollars on clothing for your child and he won't wear any of it, even though you have gone far out of your way to try to figure out exactly what he will like and get only that, and how getting the child out the door to school every morning is a major ordeal. I understand!
However, my experience has been that there is really nothing you can do short of getting OT for your child. Because this is a very real issue to the child! They are not making it up My son does have mild to moderate sensory issues in other areas, but this came out of nowhere, almost over night.
I have found that the more I tried to fight it, the more I tried to insist on him wearing things, the worse things got. In the reading I have done on sensory issues, this is common. It is not something that you can get the child through by "insisting" they wear things anyway. Even if it's only a temporary sensory thing for your child, it's still a sensory thing, a real experience for her.
One thing that does help some is by relaxing both myself and my child as much as possible. If I knew there was something that wasn't going to go over well, I would try to present it in the nicest, gentlest way possible. I would take him on my lap and help him get dressed. I would use touch to help calm him down, like stroking his hair, patting his arm, etc. If I could get him really mellow, I might have a chance at a successful dressing experience. (Might...)
But mainly, I've just tried my best to accomodate his current preferences. He got down to only two pairs of jeans he would wear to school (no other types of pants were acceptable). Both pairs had holes in the knees, even though both had already been patched. I just let him wear them until I had money to get new pants. Yes, I cringed at what his teacher might think, and yes, he wore them dirty sometimes (though I drew the line at visible stains). Right now, we finally know which style, brand and size of socks, underwear, shirts, and pants he will wear, and we are enjoying a fairly easy period at the moment until he grows out of his clothes.
I feel your frustration! You can't know just how hard this is until you've experienced it. It's not a big deal to have one or two smaller things that bug your child. What gets so tough is when they are having multiple issues with all sorts of different clothing, and you have tried multiple things to fix it, and nothing is working, you are spending tons of money, they are changing their preference every other day, etc. It is really, truly maddening! Hang in there!
Oh, and I also wanted to mention that I think my ds feels better once he gets out the door and goes to school. HIs teacher has not noticed him having any frustrations. I think he is distracted at school and thinking about other things. But the clothing still bugs him when he is getting dressed, in quiet moments, etc.