After several unsuccessful weeks on antibiotics and after consulting with several vets, we decided to try steroids under the diagnosis that it is her immune system that is overreacting and causing her lips to swell and blister as in the photos by Shadow. There is some info on the internet regarding this condition called pemphigus. If this is the cause, then the steroids (prednisone) should slow down her immune system.
I will update. She had a bad initial reaction to the prescribed prednisone immune system dosage and we have scaled it back and trying it again. The dosage will only last for a few days and taper off. I will post if this turns out to be effective.