I don't really have a full-blown suggestion, but something I noticed is that you said that she went from "sweet and timid" to a bully, and that she lays down before she lunges.
It sounds to me like you might be dealing with fear-related aggression? Is this possible? I mean, only you know your girl, but that's just what I get from reading your post.
While I agree with Stella that in many cases, the saftey of the public comes first and you may have to resort to a pinch collar, I would say that if it is fear-related, that would make it worse and not deal with the "real" issue.
So, just assuming that it is fear-related you may want to take a different approach. I don't specifically know what that might be, but perhaps someone else could chime in on that.