
Sounds like Underactive hormone and the stud dog owner is right that it is liked to infertility, which is probably a good thing, as the risk is it may be passed onto future generations.
As for your bitch herself she should have a full Thyroid panel done, and then she can be put on thyroid replacement to rectify her problem.
I'd certainly not be breeding from her.
Many dogs over 6 or so start to have lower levels of thyroid, but one that is like this in her breeding years in my opinion should not be bred from as you may end up perpetuating the problem.