If you can, try and turn your feelings about the toxic lady around. She is obviously incredibly needy and is using lies to ensure your friend sticks with her rather than you. You say that your friend has had some terrible problems that you've helped her through, perhaps she feels that this other toxic friend needs her? It can be a powerful thing, feeling needed, and perhaps it's making her feel better about her own situation?
As someone else has said, when you see your friend don't mention the toxic lady as you may end up pushing her away, unwittingly. Keep your head. Ignore the lies she's spreading, especially as your friend is aware they are just that. The toxic lady is obviously providing something your friend values, for whatever reason, as each and every friend anyone has fulfils some private reason as to why we like them, even if it's a subconscious reason.
Keep your chin held high, try not to feel hurt (for the reasons above), stand above the lies, and treat your friend the same way you always have.
Oh, and regarding the FB posts, you have two choices: 1) don't read them - all these fantastic times plastered on there are generally made by people who need constant validation. Don't give it to them; or 2) 'like' every single thing that goes on there. Validate the hell out of them. It may shut the toxic person up!