Thats as bad as when our phone line was crossed with the mayor of my towns home phone. Apparently, when some one was having their phone line fixed, it was crossed... about a week later we figured it out and the phone company came and fixed it.
That sucks though! Definately get it taken care of... and if you do the lawyer letter, maybe put in there that that woman is now responsible in paying you back for the last two years of phone service.