How to specify columns in facet_grid OR how to change labels in facet_wrap

I don't quite understand. You've already written a function that converts your short labels to long, descriptive labels. What is wrong with simply adding a new column and using facet_wrap on that column instead?

mydf <- melt(mydf, id = c('date'))
mydf$variableLab <- mf_labeller('variable',mydf$variable)

p1 <- ggplot(mydf, aes(y = value, x = date, group = variable)) +
    geom_line() +
    facet_wrap( ~ variableLab, ncol = 2)
print (p1)

To change the label names, just change the factor levels of the factor you use in facet_wrap. These will be used in facet_wrap on the strips. You can use a similar setup as you would using the labeller function in facet_grid. Just do something like:

new_labels = sapply(levels(df$factor_variable), custom_labeller_function)
df$factor_variable = factor(df$factor_variable, levels = new_labels)

Now you can use factor_variable in facet_wrap.