I'm all for DIYing, but I gotta side with ncornilsen here - you've permanently compromised the structural integrity of the bike frame and you are never going to get that back with the methods you describe. It's now dangerous for anyone to ride, and there's no reset button. The frame is done, toast, finished, dead, kaput.
Yes, you owe your friend a new bike... or at hte least a new bike frame.
More to the point, if your friend is too short for her bike, she needs a better fitting bike