Not a loose knot. You need a tight knot. They can and will work their way out of a case if the knot is loose.
And no, it won't have any trouble breathing. Pillow cases aren't air tight. You don't want it soaking wet...just wet it thoroughly then wring it out really well. Place the snake in....tie the top nice and tight...and lay it on the warm side of its enclosure. I've never had to do this for more than an hour to remove any stuck shed.
If THAT doesn't do the trick...then I recommend not messing with it anymore and wait to see if it clears up with the next shed. In the meantime, fix the enclosure to make sure the snake is happily secure and the humidity levels stay around 50% consistently. Skiploader's suggestion about the moss can work very well, but depending on your setup, you may have to re-moisten it from time to time.
Your words, "The eyes are still gray" concern me. Stuck eyecaps are not usually gray...they're usually perfectly clear but a little jagged looking around the edges.
EDIT for more thoughts: Be sure to turn the pillowcase inside out so the snake can't get caught within loose, looping threads. Also, check the seams closely before trying this and make sure all the seams and corners are sewn securely. The smallest weakness can be exploited! LOL
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