Our beautiful new (to us) home has one major problem. Neighbor is batschit crazy. An elderly couple owns the house, have lived there for over 30 years. They keep their property impeccably maintained...no complaints there. The husband is a nice man, his wife is nucking futs. Listing realtor mentioned something about it, guy from across the street (10 year resident) also said she is "touched." We met the town's mayor at a mutual friends wedding...when someone introduced us to him and he learned where we lived he said "Have you met the neighbors?...He's a doll..." (pregnant pause followed).
She's been a terror towards our contractors during the whole house renovation, called building department on us, told my GC she would fight my plan to expand the driveway (which we ultimately got approval for without a zoning variance, so she couldn't do anything).
Latest and ongoing issue is her obsession with the tiny strip of land between her garage and my driveway. From day one she made sure we knew that was her property (yeah, we know that lady

). Meanwhile, she basically cannot access it without coming onto our property, has not asked permission to do so and she routinely trespasses on our lot in order to tend to this 2x18 strip of dirt. We put up a small, unobtrusive no trespassing sign and she's freaking out about it.
My next move is to erect a fence down the entire length of my driveway along the property line, which will make it impossible for her to access the little patch of earth from my property. I don't know what else to do here, not dealing with someone who is reasonable.
Any suggestions from the brain trust?