Answer. Welcome to the Nanny State! I agree this is a frustrating situation for landlords. I believe rule No. 1 is to pick your shots. By that I mean, you want to look at this in the same way a judge or jury would. Does it pass the "smell test"? - pun intended.
To me it does not. This sounds like a case in which you've got a pretty good paper trail. But someone has to blink. If you fold on this, bad precedent is set. Here she's asking for two extra service animals. By this rationale, the two pet policy means nothing, and she could gather another six animals and make the same claim. I believe you should consult your attorney to find out what he/she recommends.
From where I sit, I think you could take at least one more step, without this going nuclear. You may want to consider issuing a 30-day notice to vacate, citing the rule and what she needs to remedy it, i.e. remove two of the pets.
At that time, the issue will come to a head. Will she go to some advocacy attorney group who says they will fight you for free? Will she fold? Will she try to compromise? There is a Roman saying that if you want peace, prepare for war. In other words, if you show her you mean business, she may take a more realistic look at her position. Until there is a show of force, she has the upper hand. If she backs off, there may be an opportunity to find a solution, e.g. and agreement to re-home the pets with a relative. Any solution that is reached should be in writing, and you should have your attorney prepare it.
If she pushes back, and has some legal group threatening a fight, you can then decide whether to hold 'em or fold em'. Remember, litigation doesn'thappen overnight. You will, at worst, get a threatening letter or two, before something happens. If you don't want the fight, then walk away. Good luck! By the way, during this dispute, if you intend to issue a 30-day letter, you