Well I cant really get into specifics here but our policies regarding recruitment and legacies have changed this fall. There was an article about this in the spring issue of the Theta magazine I believe. If you didnt get that issue, you can always see if the new information is posted on teh website in the passworded section or you can always email HQ for more information.
We had a sorta incident during our recruitment. A woman came through and was a legacy, but she didnt mark on her recruitment application she was a legacy, didnt have any recommendations, no letter of legacy introduction, and didnt tell anyone in the Theta party she was a legacy. Therefore the chapter didnt know she was a legacy. She was cut because of grade risk. Well then her sister was irate and called the chapter to complain that her sister was cut, but by then there was nothing that could be done.
I'm assuming in your case they knew she was a legacy. However, as you know legacies arent a guaranteed bid and there is the issue of chapter/pnm fit. I dont know if my post made you feel any better or worse. I do feel for you and your sister. I also know that the panhellenic formal recruitment process is not full proof and a lot of great women do sometimes slip through the cracks.