OP I've been there you need to step back ignore you're "friends" and her and basically do not engage.
Anytime someone mentions her just say hmmm really and feign disinterest. The more you try to defend yourself the more crazy you look and the more it fuels them to continue.
I found this out the hard way unfortunately for myself. I was taken to the police station and questioned about harassing my narc. When I was able to provide evidence that I wasn't and disprove the allegations she brushed it off to anyone that I had used a different phone etc and that's how I got away with it.
The allegations were utterly false. I didn't even have her contact details.
I was Internet stalked by her and her "converts" some previous friends, others people I knew of but had never had a conversation with. It was horrific. She made up awful lies and I lost all of my friends even people who I'd known most of my life.
The more I protested the more crazy I looked and the more obsessed I looked and the more she played and looked the victim.
The mask slipped a bit and some people found out what the truth was like and apologised but the damage was done after years of suffering I nearly had a breakdown. I moved hundreds of miles away and stopped giving a shit.
It was then that her unhealthy interest in me was exposed. I met now DH and she began messaging him to my horror(they had never been in the same town never mind met) she still spread rumours.
I used to hear about them and just laugh and say how silly or oh really and shrug it off. At that point she got bored and moved onto her next victim.
You can't win against these people you need to play the long game pretending its boring and waiting it out until they get bored, fake it until you make it as they say