The only way I've been able to distress designs in the past (and on the one I posted earlier) was to take an image of gravel texture, threshold it, and select color range...then use that to delete the layers down to the base shirt color. I know - ghetto huh?
That's not much different that the way you would do it with brushes. I think the main problem with your distressing was it consumed too much of your design. I would recommend wadding up a piece of heavy paper a couple of times, flattening it out, scanning it, then using curves to bring out the lines and try that. You'll get very natural distressing but less of your image will be consumed by the background color.
I guess one of these days I should try to scrape together the money for a newer version of photoshop, but damn if it ain't really expensive. Maybe if I ever win a derby that's what I'll do with the money! LoL!
Try Gimp (gimp.org) and Inkscape (inkscape.org). They are basically open source version of Photoshop and Illustrator. I use them for all of my design work.