
The kennel should only be big enough for her to stand, sit, turn around and lay down and no bigger. If she still has plenty of room after that then it gives her room to mess at one end and stay dry at another. What I did with Dozer was put a pillow behind a box to make it smaller and now he is dry (if a box will fit and give her just enough room to do all that stuff then thats all you will need, mine was still too big with just a box thats why I put a pillow behind it). His kennel is big enough to fit a german shepherd and him being a boston terrier way way to much room for him. We could leave and be gone for only an hour to come back to a wet kennel but since I did that it has worked no more wet days/nights. I am planning on getting a smaller kennel for him, I'm going to take him to the pet store and get him to try out some kennels so I can see which would fit him best.
Could she be drinking to much with the water bowl in there? You could try a water bottle like the ones they have for rabbits all you have to do is put something tasty on the end like peanut butter or something to get her to learn how to drink from it. This way she isn't able to drink lots while she is in her kennel but can still get some water.
If she is still squating where her paper was then the smell is still there which is bringing her back to the same spot.
Hope this helps some, yes her kennel is way to big if she still has plenty of room even when she is laying flat out.
Good luck :)
Edit: you said that she would use the paper, take a wet paper that she has gone on and take that outside where you want her to go....this has worked with some dogs. Just put some rocks or something on it to hold it down so it doesn't fly away and give her the command word you use for her to go.