The red did come from the lining.
It's strange though... I prewashed (and dried) all fabrics. Even tested the red flannel with a piece of muslin to make sure the muslin was going to come out white. And the red settled in the horse fabric but NOT the gray.
I want to thank all of you for your suggestions. The pink is lighter but not gone. We've tried Fels Naptha, white vinegar, oxy clean, clorox 2, alcohol, you name it, we've tried it... except the Synthrapol, I'm going to look for it today.
Unfortunately, we'll be making another jacket :(
But making this one should be easier since she's already done it once.
Off to Jo-Ann's either this afternoon or tomorrow. We're lining this one in WHITE!