I also agree that you should seek professional help. Many times, no matter how hard a person tries to describe the issues they are having with a dog, many key signs are overlooked. Most of us are not professional dog trainers, nor have we studied dog behaviors, so overlooking posturing or something else is not unlikely. The people on these forums can only suggest actions to take based on your description. Aggression and territorial issues are two behavior issues that I think relying on the advice of forum users is really not the best action to take. Please hire a professional. Maybe your friend will help you pay for it since the dog is essentially her problem sloughed onto you. Thank you for trying to help the dog! Seek a trainer that specifically works with large dogs, and has a particular interest in aggression and territorial/protection problems. Whatever you do, make sure you're there training the dog, don't send her away to a trainer.
Roxy - Feb 2005 - 75 lb American Staffordshire Bull Terrier (adopted Jul 2011)
Peewee - Jan 2006 - 8 lb Chihuahua (adopted May 2009)
Myka - Nov 1998 to Jan 2010 - 85 lb American Pit Bull Terrier cross
Lacy - Sept 1992 to July 2003 - 18 lb Reg Shetland Sheepdog