why hasn't she been excommunicated and drummed out of her order?
See post #6. The local bishop has only very limited things he can do to her. Only the superior of the Sisters of Mercy can do what you suggest.
Can. 699 §1. The supreme moderator with the council, which must consist of at least four members for validity, is to proceed collegially to the accurate consideration of the proofs, arguments, and defenses; if it has been decided through secret ballot, the supreme moderator is to issue a decree of dismissal with the reasons in law and in fact expressed at least summarily for validity.
Can. 700 A decree of dismissal does not have effect unless it has been confirmed by the Holy See, to which the decree and all the acts must be transmitted; if it concerns an institute of diocesan right, confirmation belongs to the bishop of the diocese where the house to which the religious has been attached is situated. To be valid, however, the decree must indicate the right which the dismissed possesses to make recourse to the competent authority within ten days from receiving notification. The recourse has suspensive effect.(NB: Sisters of Mercy are an Institute of Pontifical Right; therefore, the local bishop has no say in this)
Can. 703 In the case of grave external scandal or of most grave imminent harm to the institute, a member can be expelled immediately from a religious house by the major superior or, if there is danger in delay, by the local superior with the consent of the council. If it is necessary, the major superior is to take care to begin a process of dismissal according to the norm of law or is to refer the matter to the Apostolic See. (NB: again, since this is an institute of pontifical right, the bishop has no input in this process)
Those rules are good rules in the instance of a conservative, orthodox order operating in a diocese with a lib-fag ordinary; but, unfortunately, they are difficult in instances like this.
You should consider writing or faxing the Nuncio and the Prefect about this instance. Methinks if they start hearing enough about this troublesome nun, they may exert a little pressure on the superior to do something about her.