Well, as awful as this sounds, I would not have bothered making your fence all but dog proof. I would have repaired the fence as normal, and then sat and wait. A dead dog can't kill your chickens.
Also, I would "forgive" your neighbors, but not to their faces any more. And get that camera...get it on tape, and file charges. Make SURE you follow through all the way to the end- don't let them get away with it anymore. Also, go to your neighbors that saw the last incident and get a notarized statement from each of them about what they saw. You MUST cover your butt here...these people sound very devious, and will lie when it suits them.
I don't know about what other kinds of animals you have on your property, but maybe it's time to get a guard dog. Especially one that finds terriers tasty.