What angles were the X-rays taken from?? It is possible to hide an elephant in those things.
If the horse is valuable enough I would have it fluerscoped and a variety of tests run on it at a nearby vet school. I would opt for putting it under the knife instead of doing a regime of injections, but at this point you are looking at spending a lot of money on a horse that will be lucky to do lower level hunters or dressage for a few years. If the horse has serious issues at 5, can you imagine what keeping him sound at 10 or 15 will be like??
I would suggest that your friend cut her losses now and finds a good home for the horse. If at the vet school they find a very viable solution and the horse has a very good change of 100% recovery then I would say go for it. But before your friend starts digging herself into a money pit, she should consider a monetary limit on what she is going to spend to fix the horse. Instead of spending $10,000 or more on surgical procedures for a horse who will have a very limited athletic career, consider saving the money and purchasing a new horse.