Sometimes horses can get past the point of no return. Either out of rider error/fear, brain damage, or some other sort of trauma. Sometimes we may never know, and sometimes we have to come to terms with the fact that we cannot fix the horse. Even if you were able to get this horse going somewhat okay for yourself, there's no way your client is going to have the courage or experience to continue its training. If this horse cannot be figured out, it either needs to go out as a pasture companion or put down. It's sad, because it probably wasn't the horse's fault (reminds me of the horse in the Buck documentary), but if a horse is doing intentional damage to itself and another human being, it needs to be put out of its misery and out of the way of having other people potentially harm it, or she can harm them.
In my opinion, I would get on this horse in a round pen and just make it run. Put as much forward movement on it as possible. If it sucks up, make her turn sharply and move. If she heads for the wall, push her faster. She needs to move forward, not backward. I'd be on her with a crop like a heathen.