Would you believe that I am in the process of trying to fix the exact same issue on a quilt that belongs to a friend. Without going into details, I will just say that two puppies did a real number on a quilt that was made at least 10 years ago. I took photos of the different fabric that was used in the quilt and printed new fabric (made my own fabric sheets to keep the same feel to the fabric used in the quilt. Pups ate batting, parts of blocks, border, sashing, and binding in about 20 different places - not to mention an 18" vertical and 3-4 horizontal tears on the back. Took out the masicated blocks, and parts of the sashings that were chewed to pieces, and parts of the border and binding that is completely gone or chewed to threads. Took out the nasty string-like batting (poly by the way and thin as tissue paper.) and whipped stitched in replacement batting. Have been able to partially machine stitch replacement blocks and the rest will the appliquing into place - ditto the border, and binding. Will be appliquing in something to cover holes that can't be fixed any other way. The photos of the replacement fabric are close, but not an exact match. Was tempted to take pictures of the damaged areas and print those on fabric and applique over the damaged areas, but I believe my friend really wants the quilt put back as close as possible to the way it was before pups got ahold of it. I really like the applique idea and a label that tells the story. I am sure your sister was heart-sick when she discovered what her dog had done to the quilt that you made for her, and would be so happy to know that you are going to fix it. So sorry for your loss, and best of luck with your venture.