Can WonderDog be Saved?!

We've had WonderDog for 3 weeks now. Everything has been so awesome - she is potty trained, very smart, she has eagerly learned a ton of commands [sit, down, come, wait, crate, out, stay, fetch....]. She has been sweet and tolerant of the children and has allowed the 2yo to lay on her, grab her tongue, hold her tail, and commit a hundred other indignities that she has endured with patience and love.

I love this dog.

So what's the problem? .....She bites.

She bites the children [just the little ones - 5yo, 4yo, and 2yo]. She bites their faces and hands when she's excited [especially she loves to bite the 2yo's face for some reason ]. We've curbed that a good bit with just running her to exhaustion. When we first let her outside with the kids, we throw balls for her until she's just exhausted and that cuts down on the biting, though she will still randomly just reach over and bite sometimes - totally unpredictable.

The other thing she is doing is "herding" I think - if any of the kids ever run in her presence she chases them and bites their legs/calves/ankles. Those bites range from nips to full on clamping the whole mouth down over the whole leg - which is very painful [She can fit Monkey3's entire thigh into her mouth :( ]. I don't know how to stop this - it seems totally ingrained in her and its not realistic to think the children will never run around her.

In addition, she's had a few times where she growled at me and raised her hackles and got down snarling like she was going to jump me. This has not happened in over a week now, but it was very scary and I'm not sure what her trigger was. She's definitely a bit unpredicatable.

I have talked to every person I know who knows anything about dogs, I've consulted two different trainers, I've had a really nice lady from our homeschool group who is an experienced dog trainer come over to help us work with her. I am working with her intensively on all her obedience things [4 times a day for 15 minutes, and longer after the kids are in bed at night]. She's VERY motivated to learn, wants to please, and has done beautifully with all her obedience training but.... she still bites.

I don't know what to do. Everyone is saying that I should take her back to the shelter - including my precious animal crazy sister. I am agonizing over this because I just love this dog to pieces... and I can't stand the thought of taking her back to the humane society.

I find myself thinking things like "well, she's only bitten them a few times today, and only once or twice did she really hurt them...." Which really, I can read that and see that I am being crazy to even think something like that and definitely crazy to still have this dog here, but it just breaks my heart to send her away. She doesn't MEAN to be like that. She loves the kids and me, she doesn't intend to harm us. But she IS harming us. It would be so much easier if she were just biting to be ugly, but this is not what she's doing. The thought of how sad and scared she'll be back at the Humane Society just breaks my heart.

If it were just my husband and I, I would definitely keep her. But I have to keep my children safe and I can't seem to train the biting out of her....

What a very sad situation.