Michele, my heartfelt condolences to you on the loss of your dear friend. What a beautiful manner you've chosen in which to remember her.
I do hope you come back to this message board, as many of us here have our reasons for not e-mailing strangers, and I'm sure others here will be posting their suggestions for you.
My own suggestion would be to use an anagram of SarahAnne's name to create a new name for the baby. An anagram incorporates all of the letters which made up your friend's name, and rearranges them into something new.
In a way, this might represent a touching expression of one's desire for something new and hopeful to be created, incorporating the elements -- particularly the letters of the name -- of the one who has inspired this new little life.
Here are some anagrams of boys' names from "SarahAnne":