Would your friend be willing to bring her pack over so your dog can see them go out in your yard?
Don't worry, you haven't completely destoyed her confidence. Unless you were out there beating her with the lawn sprinkler, which I highly doubt
I have two rescue dogs who were very fearful and they came through it. With patience, yours will as well.
I definitely have found that they learn a lot by watching other dogs...maybe if she's with the pack and they show no fear she'll snap back out of it.