My DS (4.2) had this, except his hair fell out over the space of a week! I would say he lost about 80% of his hair in total.
He also had the blood tests which came back normal apart from being slightly anaemic, but the same as your dd not enough to need iron tablets. DH's cousin is a GP and he advised it was telogen effluvium. He had been run down for quite a few weeks, with different colds and sicknes bugs and he said that was enough to cause it.
This all happened over Christmas and New Year and his hair has since grown back. He had wavy thickish hair before it fell out, but now he has very thick, cork screw curls! Everyone comments on it
Hope this reassures you a bit, I know how upsetting it is to see it happen