*rubs hands together* This is my speciality!

KC had a bad experience. You'd still be a little grumpy too if you got hurt really bad, wouldn't you? It probably didn't help when Lucy came to stay. My suggestion to you, is get KC's favorite treats and whenever you walk by her (or anyone else does), drop a treat (or just a kibble from her food dish) and so she relates people with something good. Have people she doesn't know talk very gently to her and then give her a kibble. Whatever you do, don't walk fast towards her, keep your eyes down (not focused on her) and try to work with her when Lucy isn't around.

Lucy sounds a lot like Maui. Maui was very roughly handled because of his showing and when he retired and we adopted him, he would NOT let anyone touch his belly, or let him pick him up. Simple (food related) answer. When she sits on your lap (if she does) just gently drape your arms around her and give her a quick squeeze, and when she doesn't react, give her a treat. But if she does (...this worked FABULOUSLY with Maui) hold her for 15 seconds until she stops struggling and then give her a treat. Always give them a reward for letting you "handle them". Don't raise your voice - keep it neutral. High pitched voices will scare them too.
Another good thing that I did with Maui was whenever ANYONE came to the house, they had to let Maui sniff them and then they had to give him a treat. That made him like strangers.

Maui is still very skittish when it comes to noises though. Especially when we've been quiet and one of us moves. It really makes him fly out of his skin! I've found that if I whisper something or just talk for a second before I move, Maui won't jump and it aleviates the jumping.

I also found it very helpful when I trained Maui to like to be held. It was a hard task (I did it the way I explained for KC). Maui hated to be confined and to him, being held was confinement. It meant that he was going to be twisted, and turned and have body parts touched and he didn't have a say in it. That made him scared. So when he would sit in my lap, I would just drape my arms around him and give him a hug and then just gradually hold it for longer - and when he squirmed I let him loose and then gave him a treat. He realized that he had the power to make me let him go. Eventually after him granting me access to his belly (he loves tummy rubs, weird, huh?) I picked him up - but let him loose at the first sign of tension but gave him a treat. I still hold him in front of the window so he can see outside. It gives him an advantage and he rarely squirms now (unless he "really" wants down). My method might have been unconventional, but it worked! (I'm trying this on my sister's kitten, she's afraid of 'falling' I think).

Just make sure you work with them seperately though. And do tell KC from time to time that she's still the the princess and that she's in charge. Cats have an ego problem, lol.

Good luck and I hope everything goes okay! *pats Lucy and KC*