I think it's too late to cancel the party. That is a life event that should not be a reward for doing work.
I think she needs to have rewards for accomplishments. She needs to have consequences for not doing her jobs too. But in the long run it's her room. If you don't like it shut the door and move on.
Peer pressure will make her ashamed and she'll eventually start cleaning it if she has the skills taught to her.
Start minimizing toys. She is at that stage where the older toys will be easily parted with. If she has too many clothes go through them and pass them to a friend or donate them. She needs to be part of the process and it may take all Summer. Work a half hour a day sorting through things and have boxs labeled for things, give to XXX, give to Cousin XXX, donate to Goodwill, winter clothes for Fall 2011 and Winter 2012. We spend a week each Spring and Fall taking out the off season clothes and trying on the stored clothes and organizing them. It is easier for our girls to keep her clothes manageable this way. Plus I don't have arguments about wearing flip flops on snow days, they are put up and stored.
I have the flat tubs that fit under beds under our boys bed but under the girls daybed I have taller tubs made by Rubbermaid. They are the perfect height and I can just write on them. I have a dust ruffle and out of sight often means out of mind.
My friend has never sat and taught her kids how to clean. They have no idea how to organize a room to clean it. They just sit there and cry saying they don't know what to do. She tells them over and over, pick up all the books and put them up, then pick up all the clean clothes and put them back in their homes, then put the dirty clothes in the hamper, of course every piece of clothing they own is out of the closet and on the floor. In my opinion they are dirty and need to be rewashed but they live out in the country and their play clothes are always dirty.
Kids cannot think in the abstract. They have to have more concrete instructions until they are more adolescents. Make a cleaning list and plst it somewhere like inside the closer door.
1. Pick up all the books and put them on the shelves, standing up.
2. Pick up all the clothes, take the hangers out of them and put the hangers back in the closet, put the dirty clothes in the hamper, when hamper is full get a laundry basket and fill it up. Take all to the laundry room.
3. Take all Polly Pocket dolls and put them in their bin/tub/bucket, put all accessories in their home too. What ever her biggest, messiest toys are might go here instead.
4. Gather all the Barbie dolls and put them in the door hanger. Put all the Barbie clothes in the Barbie bin/tub/storage place.
5. Take any dishes back to the kitchen, run hot water in them and let them soak.
Add more and more smaller jobs here. She needs steps and the ability to accomplish things to feel good and feel like she is able.
Have some sort of reward system, even just in your mind, to let her know you noticed what she has done, every step needs a high five, a sticker, a snuggle, a pop or granola bar (we call them candy bars), something to show you noticed and she has accomplished a task. She'll start learning too and be able to clean when she is older and has her own home.
Final step, run vacuum or sweep then take trash out to the big garbage can in the garage.
Have a set day for her to change her sheets and bedding. Plan on her helping and then she'll start learning how to do laundry herself too. Of course that's another 10-15 steps of learning a task, like reading labels to make sure it's even washable. Figuring out how to sort colors and learning to understand the weights of fabrics, for example don't wash white towels with black hose and turtle necks...we love the white fuzzies on the black stuff Right???? I also don't wash denim with light weight materials. It chews the lighter stuff up and spits them out yucky.