The site is very nice. As far as why your conversion rates are low, thats easy. You need a landing page. The main site is great for telling people about who you are and introducing your company. But if you are paying for PPC, then the visitor needs to go to a page which is focused on selling your shirts. (your main site is not selling, it's informing.)

The landing page will need to include a few things.
- Benefit statement, how will buying your shirt benefit the visitor. (i.e. Get more chicks with striped elephant gear or Like the way you look with elephant t-shirts.
- Call to action - You need to tell the visitor what to do. Tell Them to order now, buy now, etc...
- The product needs to be more prominently displayed with a buy it now button or add to cart button under the pic.

Do some research on landing pages and you will resolve your conversion rate problems.

P.S. $20 for a t-shirt may be a bit much, research who your target market is and who your competition is. I can buy a nice looking t-shirt at target for $5 and I can buy a $150 t-shirt from Roberto Cavalli. The question is, how is your t-shirt better then than the target t-shirt. (Maybe it's made in the USA or Maybe it's some ultra lightweight material, maybe you donate 20% of the proceeds to charity.)

Do some market research and you'll be fine.