Have you posted in the training section - K9pro/K9force is a professional dog trainer and particularily skilled at teaching dogs to be comfortable around other dogs, without beating the dog or harming it in any way. He will only read and respond to your post if you put it in there.
K9Pro Dog Training and Behaviour - Australian Purebred & Crossbreed Dog Forum
I've watched Steve work with several aggressive dogs, one at a time. My dog (being the super omega - you can be the boss totally non-threatening kind of dog.) was the practice dog, and the aggressive dog was worked towards and away from my dog until it could approach calmly. Some of them even did a proper sniff greeting and initiated a bit of play - in one short session of an afternoon. And these were dogs that would lunge barking and growling aggressively (with intent to attack) any time they got near a dog.
First thing you need is control of your "puppy" so you can stop the lunging and pulling. I like a front attach harness "sensible" but there are certain types of collars and nosebands that also work. But you need to be taught how to use them by someone who knows what they're doing. Even having watched Steve (K9pro) at work - I wouldn't try some of his tools without close supervision.
When I went to the rescue - I picked the friendly dog not the nervous shy aloof one - but I guess it's too late for that now, and you work with what you've got.
This looks like she was self rewarding for bad behaviour. As soon as she becomes interested in something she should not - you need to stop it then. For my dog - "leave its", checks on the collar or harness, and very yummy fresh roast chicken distractions were enough. I have to be consistent and persistant about it, which is why we're failing to eradicate the possum poo as distraction but I'll get there eventually. Sometimes body blocking (stand between the dog and its distraction) works as well but you can't let it escalate to pulling, lunging and choking because then your dog might think the other dogs are causing this ie attacking and hurting her.But she quickly became over excited and I could not hold or regain her attention - food treats did not work. I persisted until she eventually was choking herself with trying to get to the other dogs
What I know now, is to walk away and only approach while she's calm, and turn away the second she starts pulling or showing interest without permission to "say hello". I get loads of comments about how calm and well behaved she is now, but she was a bunta puppy. Wanted desperately to say hello to everybody and everything. She still does but has much more self control - because I've demanded it of her. I get what I want first, then she gets what she wants.
Not sure this was the ideal approach either, though I do it sometimes. Eg I don't want my dog to make friends with the gas meter reader man. She hates him and I haven't asked for anything different, I just remove her from the situation.Indi responded by backing away, tail between legs, hackles raised, growling and barking. I removed her from the situation.
The lawn mower man on the other hand... she likes him but she thinks he's "wrong" somehow so she barks a lot like she's trying to get him to run or something. And he keeps looking at her. So I say "don't look at her directly, look at her sideways ie not quite direct eye contact". The second he broke eye contact, she lost interest in him, stopped barking at him and went off sniffing the yard (as far as she could get on lead). It was a dramatic change. Then she came back and licked him and let him pat her.
I'm willing to bet your nervous cat people were staring at your dog while continuing to approach and that freaked the dog out. If they'd sat down (on chairs, not the ground) and stared into space (can still watch her but not stare at her), you might have gotten a different reaction from your dog. Removing your dog gives her no opportunity to learn what is appropriate.
You could benefit from some basic dog calming techniques.
Questions & Ansvers from Turid Rugaas
Techniques to Calm Your Dog
I would also consider crate training your dog, and give her a big walk eg an hour in the morning and then put her in the crate in a sheltered spot or inside the house, until you have time to supervise her - cover it up so she can't see out if she acts nervy or barks a lot. Google "crate training" for techniques - the dog should see the crate as her personal safe place where good things happen, not as a prison and place of torture (eg no kids banging on the crate).
And before drugging a dog for behaviour problems, I would consider contacting
Paul McGreevy - vet scientist and behaviourist at Sydney Uni - if he can't help, ask him to recommend someone and ask his opinion on anxiety med for dogs.
Associate Professor Paul McGreevy - About the Faculty - The University of Sydney
You may still need to medicate the dog so that you can then train her back to more acceptable behaviour but the only way I'd consider it would be if the only other choice was PTS. I think you still have a lot of options before it comes to this.