Difficult situation and she sounds like a real winner to have to work with now that she is on a power trip.
If you can't get her fired, perhaps you can focus on the things you know for sure and the things you as her manager can take care of...pilfering through your office, not focusing on tasks and being abbrasive to co-workers...they all sound like things that you as her boss, can address. To me, it is kind of like establishing boundaries at work too. If she realizes you are not going to accept her behavior and roll over, perhaps there is a possibility of change.
Hugs - Dealing with a hostile work environment is the pits. I hope things change soon.