Well i have no experience of using flyers for a t shirt business but i do have experience at using flyers to promote an event so ill use this as an example.
My last venture was college speed dating

and i was specifically targeting university students. I used both posters and flyers to advertise my events. The last event was in a college of 10,000 students. I had over 80 A3 full color posters around the college and i handed out over 800 flyers which were in florescent pink.
I discovered form a questionnaire at the event that not one person that was handed the flyer turned up to the event!

And i also found out that people (at least college student) dont usually read posters, they glance.

The best source of advertising is definitely "word of Mouth". However, word of mouth is generally generate buy someone who has taken the time to read the poster or flyer and was excited about what they read and told friends. so it seems to be a catch 22 scenario. A clever radio advert with a catchy phrase or music might create more of a talking discussion and awareness to your market than distributing flyers. you can also get a radio advert created for about $50 or less but i have no idea what your 30s airplay slots for local radio cost in the US. Over here i can get 3 airplays for $60. That covers a listnership of 20,000 on any given 1/2 hour. Maybe look into that in your local town. by the way only 20 showed up to that event with all that advertising.
It can be very difficult to reach a particular market, but ive learned that clever marketing is the way to go,

you have to create a hype (like monkeylantern suggested a skyscraper ha, ha, maybe not to that extent unless you can afford it) so people become curious and want to see and know more.
I would also suggest (
if it is legal to do in your town or city) approaching local universities and put up a stand up selling your t shirts as students love the hype of something new happening in the college and tend to impulse buy when there with their friends. In my old uni we had people selling posters and clothes at different times of the year and were very sucessfuly form speaking with them. obviously they would have to give some nominal fee to the college for the use of the corridor. This is a great was of advertising your business if you locate a uni with 5000 or more students. you can then have a large poster behind you advertising your online website! just an idea.
hope it works out.