Quick update: told the soon-to-be-ex customer that I was willing to cover damages not exceeded $400 - which to me is worth it to get this P.O.S. off my hands. She agreed. Her story was full of holes, and while I can't prove we are not to blame, she can't prove that we are. I figured, let's end this quickly. Being direct and stern is a great way to deal with customers who NEED to be told how things work.
Thanks again, fellas!