Heh, all of this makes sense!

My understanding was that you had to win in a regional pageant before competing in the Miss Drag Queen USA contest. I still feel like Chi Chi had a long way to go, before she achieved that utter, utter fabulousness of Step 4. So my takeaway is that it was one year later.
Because honestly, there is no way that Chi Chi could have pulled it together like that in a week or two. Plus it wouldn't be fair to Noxi or Vida, who had worked very hard to get there. And there wouldn't have been another tie, so at least we didn't see which person won over the other (or if they both were beaten by someone else).
What is also interesting to note is that Julie Newmar was in attendance. I think if she was going to be there, it would have been advertised and Vida would have known in advance about her being there. So maybe she put the wheels in motion and requested Julie be in attendance at the next awards ceremony - after all of her "guidance"?
Just a thought!