I am not a dog person.

The Long Story: (feel free to skip to the last section if you just want to get to the point)

So my mother and I have lived in a development of rowhouses for the past 10 years or so, and during this time we've dealt with a woman two doors down that we've come to call the "crazy bird woman." I have never seen the inside of her house, but the birds are very audible from the outside even with all of her windows closed, and if one is open, the screaming can be heard inside of my house when all my windows are closed. Supposedly, she breeds these exotic birds and sells them. Over the years she's had a lot of health problems, beside the fact that she is an absolute nutter. So my brother has been conscripted by her multiple times to help move furniture and whatnot. He told me that many of the birds were featherless and seemed neurotic. The ASPCA has been to her house on about three occasions, but no animals were ever removed.

In the earlier years she also dabbled in the business of selling puppies of different small breeds, but mostly yorkshire terriers. She also had some himalayan kittens at some point. We never saw the parent animals, but we assumed perhaps she'd gotten the babies from a third party. Not long ago, she brought home a pit bull female that I'm sure was intended for breeding, but all she ever did for that dog was tie it in the front yard on an 8 foot cord. Keep in mind, these are row houses--so the "yards" are about the size of the average parking space. The dog was never trained or properly socialized, so she completely ripped apart the grass and the bushes, and made it difficult for the neighbors to get into their house for fear of it attacking them. She eventually got rid of her.

Once the pit bull was gone, she brought back a rotweiler puppy. After a couple of days she approached my mom with the question "You want a yorkie?" she said no at first, because of our cats, but after we discussed it we were so astounded by the fact that that yorkie must be the mother of the puppies she had years ago, and that in all that time we'd never seen the dog outside once. So we decided we'd take the dog, and then rehome it as soon as we could.

I talked with the crazy bird woman about it for awhile, and asked her questions about the dog. Here are the highlights:
Me: How old is she? CBW: Oh, about eight. (oh my god, that dog's been in there for EIGHT YEARS?) Me: Is she spayed? CBW: She stopped going into heat. (Oh, I see. This is why she's getting rid of her.) Me: Does she have her shots? Who's her vet? CBW: She's due, just take her to Petco or something. (Wow, it's probably never been to the vet.)

Eventually she brings the dog out, she's just washed her, so I can only imagine how she must've looked beforehand. I spent about three hours combing out the mats. At least the dog is very nice, very tolerant, not what I expected. However, she drooped sideways when she walked, and had really nasty eyes. The vet said she was droopy due to muscle atrophy from never having been walked, and the eyes were probably due to the huge amount of bird dust she was subjected to. Otherwise, she has rotten teeth, there are only three teeth left.

Main Point:
We've rescued (with the intent of rehoming) a fairly healthy yorkshire terrier with a great temperment, and I feel so relieved she's not locked in that woman's bathroom anymore, but this dog is DRIVING ME INSAAANNEEE. I've never had a dog before, and I'm much more used to the independence of cats. We've been walking her about 5 times a day in a vain attempt to accomplish house training, and in that time she's gotten over her droopiness, and she does sometimes go outside, but she still does her business in the house. When we're gone and while we're sleeping we keep her in the kitchen with baby gates, and she just barks incessantly. I can't get any sleep because she barks into the night and then at the crack of dawn, she's at it again. We're trying to do the basic things like reward her for doing business outside and ignoring the barking, but it's just not getting any better. And my poor cats won't leave the basement while she's here, and my cat is my best little buddy, I hate that he's so unhappy. To make matters worse, my mother is growing attached to her, and as many times as I tell people that we're giving her away, she alludes to keeping her! Don't get me wrong, it's a great dog and it will make someone very happy, but along with the cats' unhappiness, I'm doing all the walking, and poop cleaning, and bathing, and brushing. I think if she stays, I'll only resent her.
Any suggestions? Or more importantly--any takers? SHE COMES WITH FREE FOOD AND ACCESSORIESSSS!!! Located in the Washington D.C. area, you know you want to come see our nation's capital anyway, so it's totally worth the trip.

Hiya
Whilst i cant comment on whether or not you should re-home the doggie, i can offer some basic ideas about the barking issues. As you can imagine, the dog has been in the same place for 8 years and has grown accustomed to certain familiarities in her life. So, being suddenly moved to a different environment she is obviously nervous and is showing signs of seperation anxiety. i.e. thats why she is barking when left alone. It may be that she had a crate with CBW. You could try getting a nice crate, not overly big but just nice for her to have a place she knows is hers. Initially, put the crate in the room where your family will be. Say during the evening when you are sat in the lounge watching TV, have the crate in there. Put her in the crate with some blankets or a dog bed, and some treats. Close the door.
Now, if she starts making a noise, barking or whining, ignore her completely. Dont even look at her or as Caesar Milan would say, "No touch, no speak, no look". This is really important, as if you give her any attention at all she would have won.
If she stays quiet for say 20 minutes, then go to the crate and let her out. Give her a treat but dont make a big fuss.
Leave the crate door open. Keep doing this every day and she will soon know that the crate is her house and what is expected of her whilst in there.
You can do it in different rooms and at different times of the day. Once she seems to have grasped the basics, you can start leaving the room with her in her crate. Again, any noise ignore.

As for fouling in the house, this is going to be tuff as 8 years of probably doing it is a fixed habit. The crate could go a way to help though. Try and get used to her routines, like when she needs to go out. When you let her out, and she does her business reward her.
If she does have an accident in the house, dont make too big a deal out of it, but simply take her outside.

She may not ever fully change this habit though.

Thanks for the advice, a few people have suggested the crate, but I have these horrible visions of waking up and finding her and everything else in the crate covered in urine and feces. I'm worried that since she's been confined for so long, she doesn't have the sense to keep herself clean. I've been bathing her twice a week since we've gotten her because the fur is so long, and she steps in her own.. messes..

Thank goodness she's cooperative, at least.

We have a similar problem with our old boy. I got him as a rescue (stray) 9 years ago and he's about 15 now. Never been properly clean but generally only if you're not in the room with him. He's got very short legs and a long coat so I keep it clippered fairly short so it's easier to manage and doesn't get so dirty.

But like yours he's has such a lovely temperament :D

If her coat is that long, i would get her clipped :D She'll feel much more comfortable