Fairly simple to resolve this.

That said, I can't simply let her get away with intentionally testing the limits at every turn and paying anything other than the FULL rent due, especially when we have been very generous in working with her to this point, and I know we'll have to do an eviction later in the year if we don't resolve the problem now.Any suggestions?

If it takes you 5 years to pay back the DP, which I''m betting it will if you can't save a DP very fast, then you have FIVE years or however long it takes to resolve that debt before you can see the profits (the fun part you are looking for) from your investment.

If the association would lose the lawsuit, and it was not covered by their insurance, then the BOD is more likely to special assess each unit to resolve the debt.  

I find it hard to believe that its a problem they would have been working on for almost 50 years but unable to resolve.

Please let us know if it's been resolved or not.  

How does vrbo resolve issues such as this?

I believe real estate will bounce back briefly once the general infrastructure situation is largely resolved, so by about March-April we should see a surge of activity until August, as people try to sell before the major part of the hurricane season.

, very few of them are going to be resolved by that particular solution.

Drop the rent low enough to accommodate for this problem until its resolved.