Thanks for the comments and advice. I appreciate it! I have thought about moving, however, that would mean uprooting so much stuff, not to mention all the complications with our landlord and agency boss. The rent is paid for the year on this house and it would cause big issues to leave. Not to mention loosing the yard. But I've still thought about it.
More tempting is involving the wali/sheikh/and or police. This is an option. Our command of Arabic is good enough to negotiate that, and perhaps it would, as you say, make them realize that we're serious.
Most of the time, backing out here only causes problems. The town is small. Most people know most people. Getting "scared" out of their neighborhood is likely precisely what they would like, and word would get around that we're able to be intimidated. I'd rather play by their rules.
If I've learned anything in my 2 years in the region, it's that if you CAN, playing the wusta card and proving to them that you're not easily bamboozled, that you KNOW how things work and can pull consequences for them...you gain respect. Leaving will just show we lost. I hate to put it in those terms, but it's something of cultural battle of the wills.
We live here, and are invested. It's not like we're tourists anymore. Switching from visitor to member of society (granted at a lesser level) changes the game.
If your neighbors were harassing you, would you just up and move? Probably not.
I think I just answered my own question (with your help!). We should probably take one more stab and the neighbors one-on-one and then take it up a level to the "authorities".