I agree, I don't think you've done anything wrong, either. It's not like you planned for this to happen. And IMO honesty will serve you best. When the opportunity arrises, tell her that you realized that you thought you would be OK with the arrangement and, to your surprise, you found it uncomfortable, not because of her in any way, but because of you and your history. I would think that she would understand the need for a place of your own.
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Vickie
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