J.,
First off, my son is also breastfed, but I have never had any problems with his passy. He uses the "MAM" 0 to 6 month passy. He will not take any other kind. I don't think that a "comfort passy" cause nipple confusion, at least not from what I have found. (The hospital gave my son a passy from the time he was born, and they knew I was breastfeeding.) Maybe you should try different types of passies...shapes, sizes, etc. My mom would use a regular bottle nipple and stuff something inside to make it firm.
The not staying asleep all of the sudden is a normal stage they go through. My son did it b/t 6 and 8 weeks and many other mothers told me their babies did that around the same age as well. You should try a book that uses the 5 S's method. I like a book called "The happiest baby on the block". It's by Harvery Karp I believe. It's not a scheduling book, but teaches the sensitivities of babies 3 months and younger and how to soothe them. Really very interesting concepts.
As far as putting himself to sleep on his own, I think that will come with age. My son is now 12 weeks and doing much better with putting himself to sleep (with the help of his passy). Until about 9 weeks I had to rock him to sleep for about an hour, then it got gradually less. I also used co-sleeping to get his sleep schedule in line with ours. Many people do not like the idea, but I found it to be useful and it allowed me to get more sleep...especially since you are breastfeeding. More info at http://www.askdrsears.com/html/7/T071000.asp
