Oh so she's running to mutual friends for "support". That smacks of someone is knows she's doing wrong and just wants backup.
In the end, Meme, it's going to be financially cheaper to pay her off but personally I'd never speak to the broad again. Friends don't do this. When my friend brought her dog for the weekend, had a fight broke out suddenly, we would have got them apart and covered our own dog's vet bills. She asked permission to bring Sandy, I granted it - therefore as friends we both knew and took the risks involved. We minimized those risks of course but still, friends do NOT look to screw over friends.
If you pay her off, get that vet bill, do NOT pay her, pay the vet unless she can produce absolute proof she's already paid the entire bill in full. Don't pay her in cash and do make sure you get a receipt or have a way to prove you paid what you paid to who you paid it to. Make her sign something in writing that you are paying not out of any legal obligation to but simply as a friend helping a friend and that your paying half the vet bill does NOT mean you admit any liability now or in the future. I'm sorry but I wouldn't trust this chick at all.
What if she doesn't follow her vet's advice and that dog keels over tomorrow? Doesn't seem like she ran to get it help in the first place. Is she going to come after you guys for a replacement cost on her purebred? Get something in writing Memes to CYA.