Considering Cashing in a 401K. Help Please.

Jason has a 401k with about $5,000 in it.  He is on unemployment with no job in sight.  He is in school now, so once he graduates he will have a better chance to get a job and we have even discussed moving away to get a good one (If you know me you know this is a big deal.  I don't cut cords well, and almost our entire families live within 10 minutes of us).  But that doesn't help with now.  Right now we aren't doing so well. 

So I'm brainstorming some ways to bring in some extra money, without having to suffer from doing so (something I've read the 401k does). 

We could sell our van, but almost everywhere we need to go requires some driving, three kids aren't easy to get around this town full of pedestrian-unfriendly motorists, plus we would owe more than it's worth which makes it a very bad idea all around.  We have also become a taxi for others sometimes.  We have two other cars- one which we are trying to sell but have no buyers.  And the other I am trying to convince Jason to trade in for a motorcycle or scooter since he only uses it for school (and then for work) but I don't know what he'd do in the winter or in rain since he has lots of school books to carry and his school ends late (well after Zachary's school bedtime).  The school tries to work out car pools but they are calling him because he is one of the only ones in this area of town with a car!!  The car he uses is only worth about $3,000 or maybe even less now.  So we haven't figured that out yet, but once we get that one car sold it will be around $3500 (that number is getting lower every day) we can use towards bills.  We will figure that out soon I hope! 

I want to have a yard sale which might get us a few hundred dollars if it's a good weekend.  I have a lot to get rid of and I'm already figuring out prices for everything.  I'm trying to set good prices but I am not sure what to sell things at.  Our neighbors had a yard sale a few weeks ago but they barely made any money all weekend.  Their prices were way too high ($3 for a puzzle, $5 for a shirt).  I was thinking of not pricing any clothing more than $2 and going as low as $.25 or packing like items (newborn clothes and stuff) at even better bargains for buying more at once.  I have enough non-fitting clothing from me, Jason and the kids that I could open up my own shop (something I've wished I could actually do)!!  I have some toys and decor too, but that is where I am lost on what to price things.  Maybe I should just shoot for not pricing anything more than $5.  I love my books so much (my dream home would have a library full of used books!), but if I can get some money from some of them it would help.  We have some kitchen items that we rarely or never use.  I can only imagine that the second I sell something I'll find a need for it.  I think we can do well, if Jason will give me a few days away from the kids to get it done.  I thought about maybe even including the older two with a lemonade stand, but I learned recently that our city frowns on even simple sales like that.  I'd have to ask the borough office when I go to pay for the yard sale license ($5 per yard sale).  We tried to have a community yard sale once but everyone backed out but us and we looked like fools, having had signs put up annoucing a community sale.  If anyone has any suggestions I am open to them.  About prices or anything else.

I have even thought about asking my niece to come live with us and paying rent, but there is already a fight for the bathroom 4 times a day.  And she would more likely contribute to, rather than help with the messy house.  She can't do it now anyway because she has to take care of my grandma, who just had a health scare.  My mom has a big dog that hates my kids and she won't get rid of her (she's a rescued, abused doggy), plus she values her privacy too much to live with 5 other people.  I won't move in a stranger with my kids!     

Jason has an investment account that has lost a good bit, but still has around $400 in it.  Not even enough for the mortgage, but it will cover something.  I am thinking that is the first thing we should empty, since the penalties seem to be fewer than the 401k.  I also told Jason to talk to his grandmother about helping if she can.  He seriously needs to consider working for them (yardwork, household chores) for some money.  They will do that for him, for sure because they do it with his siblings when they need extra money. 

And then there is the 401k.  I forget how much we lose if we withdraw the entire amount.  I've read a few things on 401ks but I seriously need a layman breakdown.  I don't know what any of it means!  But how much does it screw with our income taxes?  What are our other options and how do they work?  I read a post about rolling 401ks into IRAs but I didn't understand anything about what was being said.  We need the money asap but this is our absolute last resort and we will do anything else before resorting to stiff penalties.  Anyone have any (easy to understand) ideas about 401ks?