AMy, I do not know what to tell you to do about Lady. If her bumps keep getting worse, try getting the opinion of another vet.

Is there no way for Lady to start coming inside? Perhaps Melissa could convince them to let her in her room. She could have a crate for her in there. Keep Lady on Flea and tick preventative to assure the parents she will not be carrying anything into the house with her.

Best of luck to Melissa and Lady. She will be in my thoughts.