Would standing up for yourself make you feel better? Reading your post, I sort of get the feeling that a part of you would like to do this --- and that perhaps your failure to do so is contributing to the extra bad feelings.

It sounds like there is no real harm in burning a bridge with her. Why should she always get the last word because everyone is scared of her? Everyone is used to her saying rude things about other people and painting herself as the victim -- they know she is lying.