Oh, my heart goes out to her. I agree with everyone who says a block colour would be better. I think a dark brown (a la Anne Hathaway, in fact) would look good for a pixie cut, and the cut needs to be more jaggedy, if you know what I mean - more asymmetrical and pointy. Take her to a really good hairdresser and they will definitely sort it out.
The next thing to do, after she's been to a decent hairdresser, is to take her to a really cool cosmetics store - like Mac - and get an assistant to do a funky makeover for her. Whenever I've had a really drastic cut that I've been unsure of, it's always helped me to pop on a bit of dramatic make-up and rock it out.
I can totally empathise, as well. When I was 14 I had what were supposed to be reddish lowlights done, but the hairdresser left the bleach on too long and I ended up with silvery blonde highlights - I looked like I was going prematurely grey. I sobbed so much! My mum went straight out to the supermarket and got me a dark red all-over home dye, which I did that night, and it actually ended up being one of the coolest hairstyles I ever had at school.
And my husband still won't let me forget the time I had my boob-length hair chopped to a chin-length bob. He came home and found me sobbing. Hilariously, he couldn't work out why I was crying - he didn't even notice that I'd had my hair cut!!!!
Best of luck, and do come back and post a picture of the new do :)