@polarbear: Thank you for the ideas. We are going to try that technique to cut down on the drama and give her some second chances. It makes a lot of sense in terms of helping them feel like they're still in control, while hopefully leading to a positive outcome.

@Dude: It's possible our lack of highly structured discipline, like a rewards/consequences chart, is not helping this situation. That being said, we do punish, take toys/video games/TV/computer away, but part of my point was there is nothing we do that should cause her to fear being wrong, like ridicule, or severe consequences that would make her lie in order to avoid getting in trouble.