I'm very sorry for the loss of your chickens, as we all are. It's always very difficult to lose any, let alone all of them.
However,
Every time I see a post where someone is getting several hundred $$ for their chickens, it makes me sad inside. I know they are our pets, BUT:
What happened to being neighborly?? I really think that's part of the problem in our country today, the whole, you wronged me and now you are going to pay (literally)! mentality really gets me. There's nothing wrong with fair market value, but over that, it becomes unfair for the other person.
I do think it's important to get to the bottom of this with your neighbor, either she finds a way to keep her dog away from your chickens, or she finds it a new home, or you take matters into your own hands. No compromises there.
If it were a wild predator, you wouldn't get any compensation at all, and here you've gotten way over market value. Purely speaking in terms of money, you just came out way ahead.
Please be nice to your neighbor, you just never know when you may be on the other side.
Remember, everyone, the coffee at Mc Donald's is SUPPOSED to be hot.