In this situation and with such a significant discount given, I would give her a 'credit' for a future 8" cake with your apologies. It's not as if she was allergic to nuts and you made her walnut cake or gave her random flavors, it was a simple mistake.
I understand she paid for a service and it was a bit different from what she received but I think she is being ungrateful for not appreciating the significant discount she was given to begin with. I am not saying discounted cake is not held to the same standards as full price cake
, I am just saying that the mistake made was not significant enough, IMHO, to warrant a refund. I would however offer some sort of free product as compensation - just to keep the peace, etc.
If she pushes you for a refund, I would be forced to appologize again and politely point out the huge discount and minor mistake made. Is she a cheapskate bridezilla trying to get free cake?
I'm sure most will go in favor of the full refund but my goodness, swapping flavors is not the end of the world. Just my 2 cents