It sounds like you have a reactive dog. The timid part kind of leads me to believe that. My guess is that she is fearful of other dogs and her reaction is to scare other dogs off because she is afraid of them. There is a couple of great books that I would suggest that will help you out:

Patricia McConnell's "Fiesty Fido: Help for the Leash Aggressive Dog"

Ali Brown's "Scaredy Dog: Understanding and Rehabilitating Your Reactive Dog"

You can get either or both books by going to http://www.dogwise.com

It is not a quick fix and is going to take some work. My guess is that you will need a combination of classical conditioning and redirecting. You need to teach Luna that bad things will not happen to her when other dogs are in the area. I would also suggest a head halter or a no pull harness for walking in the meantime. The problem with regular collars or even prong collars is that they are inadvertently reinforcing her fear. I feel that prong collars especially send the wrong message. Other dogs = discomfort thus other dogs = bad things.

You can also work with a local trainer. I would suggest finding a trainer that is experience in handling dog-dog aggression issues using positive methods.

Good Luck