Unfortunately if the bank says "we gave you the money" and you say "no you didnt", then your only options are to let it go or file a small claims court lawsuit(and probably lose unless they dont show up). You could try to file theft charges against the teller, but that will probably go nowhere since there is little physical evidence.
I know you say its not possible you lost it, but we have all known people to swear on their very soul that they dont have my (keys, files, tools, whatever) only to later find out that person borrowed the item, misplaced it, and then forgot about ever borrowing it in the first place.
It happens to everyone.
Unfortunately she can't even do that! Banks like Wachovia are federally regulated by a couple of different organizations (FRB, OCC, etc. depending on the issue). You can't sue until you have exhausted regulatory appeals. The bank has probably already afforded 10 times the benefit of the doubt that any bureaucrat will.
As you said, these kinds of things happen to everyone. Banks do make mistakes occasionally and people do lose things and then sincerely believe they have not.
It is unfortunate but we can all take a lesson away from this - count your money before leaving the teller.
I had almost the opposite thing happen to me one time many years ago. I walked up to an ATM at a bank I walked by every day. I started to put my card in and saw there was money in the dispense slot. Being an honest guy (or knowing I was on video, take your pick), I took the money and went straight into the bank and turned it in. They took it extremely seriously, had me fill out a form saying where I had found it and asked me to count it in front of them before anyone from the bank touched it... It was actually pretty surprising that they were so concerned about it and how seriously they took it. Obviously someone had withdrawn it and then forgot it in the ATM.