That is so nice that you took in those dogs who needed a loving second chance with people. 
Behavior changes can be caused by so many different things that it is up to the owner to do some thorough searching as to what changes could have occurred in the dogs life.
Some of the main causes of behavior changes are a change in the environment or schedule of a dog, from something as simple as an owner getting up earlier for a new job to a change when they are walked to later nights up.
It could be something bigger, such as the death of a family member, a change in the behavior of other family members (if you are stressed your dog is far more likely to be stressed as well, and protective). Dogs feed off the energy of those around them.
Another cause could be a medical issue. Sudden changes in behavior can be brought on by neurological conditions such as seizures, anxiety and hyperactivity issues (some breeds hyper-focus and this can lead to crazy aggression and protectiveness towards the oddest of things, including inanimate objects).
Another cause could be something as simple as a dog that has matured and possibly has gone into heat. I'm guess Lily is fixed, but I do know that one of our dogs is spayed and still enters heat and she acts very differently during these times.
If Copper has recently been injured, sick or has been acting weaker then normal then Lily may find herself taking on the roll as your protector, something Copper had once done, and this could be leading to the significant behavior change. We saw the change between our two mix-breed brothers, which would swap places as the out-side guardian and prefer to watch the borders of the territory while the other enjoyed the lap of luxury inside.
Behavior changes must be met with consistent and calm responses or else it will only be fed all the more. Yelling, cuddling, or giving them attention during a "moment" will increase the likely-hood of Lily trying to do it again. Instead, you can try ignoring it or you can firmly but calmly ask her to stop what she is doing, removing her from the situation or changing the behavior to something such as asking her to sit or lie down. This refocuses her mind, breaking her out of her obsession-aggression.
Another important aspect behind obsessive behavior in dogs is mental or physical energy building up. This is especially common in naturally active or intelligent dog breeds or mixes. Labs being one. Dogs with this type of obsessive tendency need regular, daily physical and mental stimulation in the forms of fast-paced walks or jogs, hiking, sports and agility, trick-training, a chance to try tracking or hunting, or other jobs that they can set their mind too while getting their exercise out. This VASTLY improves on all behaviors seen in a dog, no matter the breed, the age, or the behavior condition, so this would be a great step towards helping.
Don't try to avoid a situation just because she is beginning to act aggressively or you are letting her rule over your schedule and your life. Instead, take small steps. Start walking her at a park where no one else is around and build up to walking her near people.
All trainer see things in a different light and use different methods, but I would certainly suggest a good trainer for Lily who can help show you a method that is not harsh but exercise discipline. A dog that doesn't know any pack rules will try to make up her own and this will majorly stress her. Since Copper isn't setting any rules to how far her behavior can go, it is up to you to help guide her towards a healthier pattern of behavior. Guarding you is not a bad thing, but obsessing is, and she must learn to refocus her attention and energy on a task that is helpful to her and you.
Another note to add is that a dog that is raised in an unstable or neglectful home, especially if separated from its mother too early (as many puppies are), is far more prone to behavioral problems, especially those not seen in dogs raised in a stable environment. For this reason, even a dog adopted as a puppy can have issues with obsession, aggression, and knowing how to properly behave around people and other animals, and this may continue to be a struggle even with guidance.
Remember, a dog is a wolf at heart. A wolf has a common goal with its pack, and works with-in the rules to accomplish it as a team. They raise a family, hunt, keep warm, and protect their territory. It takes miles of running each day, hard work, and plenty of intelligence. Lily wants to be a part of a pack with you, and she wants someone to show her what her goal is, her mission that she can work on with you as a team. Once she figures that out (as well as being taught what is NOT a goal, as a dog must be told no as well as yes to fully understand what is being asked of it), she will be a far calmer dog and you can be a far more peaceful home again.
NOTE: Female dogs tend to have far more aggressive and dominant behavioral traits towards people and other dogs. They can play "mind-games" in the way they seek out weaknesses in others. I know this because our female dogs have always tried to fight with each-other and need to be told no all the time. They've even tried to kill each other while all our poor male dogs just sat there and tried to understand what the whole point was. For this reason it may always be a bit of a struggle with a mature female dog to get past her need to be the alpha female (the one who produces puppies), even if she is spayed, and to find something else to make a goal.
I certainly hope this helps. Don't give up on her yet. Keep studying her behaviors and working with her. Be the mother she may not have had, guide her behavior with rewards when she does what is right, an understanding but firm no when she is doing something wrong, and a calm and steady hand that she can trust in to be the guide she desires.
Best of luck!
Behavior changes can be caused by so many different things that it is up to the owner to do some thorough searching as to what changes could have occurred in the dogs life.
Some of the main causes of behavior changes are a change in the environment or schedule of a dog, from something as simple as an owner getting up earlier for a new job to a change when they are walked to later nights up.
It could be something bigger, such as the death of a family member, a change in the behavior of other family members (if you are stressed your dog is far more likely to be stressed as well, and protective). Dogs feed off the energy of those around them.
Another cause could be a medical issue. Sudden changes in behavior can be brought on by neurological conditions such as seizures, anxiety and hyperactivity issues (some breeds hyper-focus and this can lead to crazy aggression and protectiveness towards the oddest of things, including inanimate objects).
Another cause could be something as simple as a dog that has matured and possibly has gone into heat. I'm guess Lily is fixed, but I do know that one of our dogs is spayed and still enters heat and she acts very differently during these times.
If Copper has recently been injured, sick or has been acting weaker then normal then Lily may find herself taking on the roll as your protector, something Copper had once done, and this could be leading to the significant behavior change. We saw the change between our two mix-breed brothers, which would swap places as the out-side guardian and prefer to watch the borders of the territory while the other enjoyed the lap of luxury inside.
Behavior changes must be met with consistent and calm responses or else it will only be fed all the more. Yelling, cuddling, or giving them attention during a "moment" will increase the likely-hood of Lily trying to do it again. Instead, you can try ignoring it or you can firmly but calmly ask her to stop what she is doing, removing her from the situation or changing the behavior to something such as asking her to sit or lie down. This refocuses her mind, breaking her out of her obsession-aggression.
Another important aspect behind obsessive behavior in dogs is mental or physical energy building up. This is especially common in naturally active or intelligent dog breeds or mixes. Labs being one. Dogs with this type of obsessive tendency need regular, daily physical and mental stimulation in the forms of fast-paced walks or jogs, hiking, sports and agility, trick-training, a chance to try tracking or hunting, or other jobs that they can set their mind too while getting their exercise out. This VASTLY improves on all behaviors seen in a dog, no matter the breed, the age, or the behavior condition, so this would be a great step towards helping.
Don't try to avoid a situation just because she is beginning to act aggressively or you are letting her rule over your schedule and your life. Instead, take small steps. Start walking her at a park where no one else is around and build up to walking her near people.
All trainer see things in a different light and use different methods, but I would certainly suggest a good trainer for Lily who can help show you a method that is not harsh but exercise discipline. A dog that doesn't know any pack rules will try to make up her own and this will majorly stress her. Since Copper isn't setting any rules to how far her behavior can go, it is up to you to help guide her towards a healthier pattern of behavior. Guarding you is not a bad thing, but obsessing is, and she must learn to refocus her attention and energy on a task that is helpful to her and you.
Another note to add is that a dog that is raised in an unstable or neglectful home, especially if separated from its mother too early (as many puppies are), is far more prone to behavioral problems, especially those not seen in dogs raised in a stable environment. For this reason, even a dog adopted as a puppy can have issues with obsession, aggression, and knowing how to properly behave around people and other animals, and this may continue to be a struggle even with guidance.
Remember, a dog is a wolf at heart. A wolf has a common goal with its pack, and works with-in the rules to accomplish it as a team. They raise a family, hunt, keep warm, and protect their territory. It takes miles of running each day, hard work, and plenty of intelligence. Lily wants to be a part of a pack with you, and she wants someone to show her what her goal is, her mission that she can work on with you as a team. Once she figures that out (as well as being taught what is NOT a goal, as a dog must be told no as well as yes to fully understand what is being asked of it), she will be a far calmer dog and you can be a far more peaceful home again.
NOTE: Female dogs tend to have far more aggressive and dominant behavioral traits towards people and other dogs. They can play "mind-games" in the way they seek out weaknesses in others. I know this because our female dogs have always tried to fight with each-other and need to be told no all the time. They've even tried to kill each other while all our poor male dogs just sat there and tried to understand what the whole point was. For this reason it may always be a bit of a struggle with a mature female dog to get past her need to be the alpha female (the one who produces puppies), even if she is spayed, and to find something else to make a goal.
I certainly hope this helps. Don't give up on her yet. Keep studying her behaviors and working with her. Be the mother she may not have had, guide her behavior with rewards when she does what is right, an understanding but firm no when she is doing something wrong, and a calm and steady hand that she can trust in to be the guide she desires.
Best of luck!