I agree with the majority here. She's trying to squeeze as much money as possible from you AND you should walk away. State your terms clearly (in writing) and tell her, "This is what I am offering you. It's now up to you to accept or decline." If you can't pay the price then you can't pay the price. It sucks that you're so attached, but that's what she's banking on.

My horse was on the market for a looooooooong time before I bought her, and the lady was pretty desperate to get rid of her, so when she acted up (reared) when I test rode her, the lady dropped the price. And threw in some tack. If the buyer's desperate, the price goes up. If the seller's desperate, the price goes down.