Machine wash and dry that baby! If that doesn't do it, I'm afraid it's a goner. :( Did you check your gauge before you started?
Don't let her be discouraged. It happens to everyone! I spent 3 months on a sweater for my sister, checked my gauge and everything, but as soon as she put it in the dryer to fluff it up.. the yarn relaxed and now it's about 4 sizes too big.
But I keep knitting anyway!!