If you signed a sublease with the housemate, then she has a bit more say in this matter. Is there a relevant clause in the original lease pertaining to what happens if you need to move for work/school, or for any legitimate reason? In any case, based on what you said, you have been actively looking for a replacement but she has turned down a number of potential tenants (presumably for no obvious reasons). If that is the case, then just go to the small claims court as she wishes. I don't think you will lose much (maybe 3 months of rent? I can't imagine you will have to pay 11 months of rent if you have brought a number of suitable candidates only to be turned down by her without any explanations).
Disclaimer: I am not a lawyer, so this is only my personal opinion.