Shield Arc, I think you already answered your query on what to do with this mess.
Her sewer is not to code. Where does YOUR water come from? Ok, she's lower than your place, but what about the adjoining 5 acres? Her sewage will compromise ANYTHING it seeps to. That's a given.
Have your lawyer research this and consider making her an offer- sell the place for pennies on the dollar to you and she moves out immediately, or someone makes a report to the county and state health. The complications of ground water contamination are immense, Shield Arc. Now we're talking not just the county health, but state as well. Then the EPA may be interested. The state Department of Environmental Quality (or the Washington equivalent), then state Fish and Game (since there is a live stream the seepage will affect), and if any nationally protected aquatic inhabitants (fish, frogs, snails, worms, etc) are at risk, the US Dept. of Fish & Wildlife Services, then the USGS, POSSIBLY the USFS and BLM and any other government agency that has anything to do with anything that may be in contact with the contaminated water. Dude, I'm not joking around- this is some very serious crap. So either she sells out dirt cheap or she can lose far more than just everything.
I suggest you find a hydrologist or a civil engineer that likes beer and after a simple "trade" see is he can advise you. Certainly, before buying anything, consult with one of those two. There is a chance that if the contamination is already bad enough, you can do yourself some major world of hurt buying her rat shack.
Man, when you start messing around with ground water, that's a beast of a whole new species.