So can anyone tell me what distinction is being drawn here? I don't think I have ever heard this pronounced other than kre-tin with a short e sound.

I've heard and used both /'krEtIn/ and /'kritIn/, but I prefer the former. That's with /E/ as in let and /i/ as in cream and /I/ as in pill. One cognate that I hadn't expected for cretin is grime from the same root *ghre:i- 'to rub'.

http://www.bartleby.com/61/roots/IE172.html

And for a bonus, can anyone suggest any other common English word to have derived from Swiss patois?

Well, it's a trick question, since there is no "Swiss language" and therefore no "Swiss patois". There are four official languages in Switzerland: French, German, Italian, and Romantsh. Not sure which you mean bise, chalet, couloir, or raclette. (I once ate a a fine restaurant in Mexico City called El Chalet Suizo; they were having a fiesta de las truchas, so I'll have to go with chalet.)