The wall hanging is lovely, and I do agree with everyone here. I am however very curious how she came up with a $60.00 price to pay. Was there something she did not like about it? What in the world was her reasoning since she orginally agreed to the $125.
That $125 should include the costs that you incurred as well, and why your giving her a discount is beyond me. I am afraid with her reaction, I would give her a detailed cost invoice, and expect her to pay that. But since you did agree on the first amount, I suppose you should stick to that, however, it does not seem she wants to stick to that, so I say invoice her for full price, and get your money.
IF not, I agree with everyone else, put it on Ebay, or where ever and sell it to recoup your costs,
Best of luck.