Item cost is no longer relevant to crafting time. Although it makes sense that you should have to spend longer crafting an item of higher quality, that's only relevant within items; a Spyglass, while difficult and involved to make from raw materials (particularly grinding the lens), probably should not take longer to make than 3 Masterwork Chain Shirts. Instead, we're going to have crafting time be a function of DC; the more intricate and difficult it is to make an item, the longer it takes. We're also going to have to have different time scales for different crafting skills; it's simply not feasible to measure Craft (Cooking) on the same scale as Craft (Armorsmithing).
Here's how it works: each band of 5 DC has different units. To get the base crafting time, start with the amount the DC is above the highest number in the lower band (so, for instance, 6 is one higher than 5, and 1 is 1 higher than 0), and multiply the result by the units. Each unit should be larger than the entire span of the previous scale. So, for metalworking:
DC: Unit (Example)
-19--15: 1 second (Failing To Open the Door to your Forge)
-14--10: 10 seconds (The Pants You're Wearing, On Fire)
-9--5: 1 minute (Warm Bits of Iron)
-4-0: 10 minutes (Chunks of slag)
1-5: Hours (Simple, small objects, such as spoons)
6-10: 6 Hours (Larger simple items, such a low-quality longsword)
11-15: 2 Days (Time-consuming, but not particularly challenging work for somebody trained, such as chainmail)
16-20: 12 Days (Difficult, highly involved work that any well-trained smith can accomplish reliably, such as full plate)
21-25: 72 Days (Extremely challenging work, approaching the limits of mortal skill; the life's work of an ordinary smith, such as a masterwork weapon)
26-30: 1 Year (Legendary work, challenging even for a master smith, perhaps a gift forged for a deity of battle)
31-35: 10 Years (History-making items, such as those further enchanted to become artifacts)
36+: For each increment, multiply previous value by 10. Such items become defining parts of a civilization's history.
Keep the same scale, just shift it up or down some steps depending on the craft in question. Certain materials, such as Adamantine, can shift the scale upward due to the difficulty of working them. Adding +10 to the DC of a given item allows a character to treat the item as though it were one band lower. I'm not sure about the rubric here, but a deity of the forge should be spewing forth masterwork swords when he belches. (He can start with a DC 25 Masterwork Longsword and add +80 to the DC, shifting it downward to a 5 second crafting time, making it take less than a round)
EDIT: Incidentally, a sword-based breath weapon needs to be a special attack on any deity of the forge printed henceforth.
I believe I had some unspoken assumptions about those time scales, which I can no longer recall. As an approximation, you make a check once for each unit of time, or once for each day (whichever is less). Failure means that the time associated with that check does not count toward your progress toward the appropriate crafting time, but it doesn't ruin any materials (possibly include a possibility of ruined materials on a sufficiently bad check?). Modify the check before you make it, so you can't wait to see what you roll before deciding how fast you're going. I'm assuming your average smith is a level 2 Expert with 5 ranks, either a masterwork tool or an apprentice to Aid Another, a +1 Int bonus, and Skill Focus, IIRC. These are all total time spent on the project
, so a 2 day project represents 6 8-hour workdays, and professionals probably will have things to work on besides their life's work Masterwork, so 72 days total doesn't seem out of line, since failures will sometimes happen.