IMO, this is difficult but NOT impossible.
Reasons why it's difficult:
She knows you.
This means, that anything you do in terms of changing for the better from an AFC to a mPUA, SHE WILL NOTICE. Behavioural changes, fashion changes, and essentially lifestyle changes, are all things she will immediately notice and question in you.
Therefore the key to changing with a girl that knows you so well, is SUBTLETY.
You're not going for peacock in this case, peacock makes everyone notice you which is fine and great for cases where you need the attraction to be instantaneous, so you shouldn't overdo peacocking with a girl who knows you if she's your target, peacock when you go out with her so other girls notice you and raise your value (clubs, parties, grocery stores, etc..).
You tried and failed.
Your biggest problem will be getting her to change that preconcieved notion in her head, that everytime she looks at you, she sees that AFC who tried and tried and failed.
Fastest way to fix that is what hollywoodd said in his post.
Girls want what they can't have, its true and its simple, they're always attracted to the dominant male. Problem is, you made it more than clear you want her, you're out there on a silver platter and she's never ever going to take you when you gift wrapped your heart and handed it over. Go out with her after you've radicated your lifestyle and feel ready to pick up some hotties. When you're out just go and pick up other girls (they HAVE to be better looking than your friend, doesnt work otherwise) and work the jealousy angle.
When you pick up a hotter girl, the first reaction your friend will get is insecurity, and its a BIG one. All negs do is basically work on a girls insecurity on a fun saavy way, and make you come off as dominant, strong, and with more value.
Think of this as like the king of negs, if you make a succesful pick up it will raise your value considerably, work her insecurity and spark a tiny little bit of jealousy which will be just enough to make her think "did i fuck up by not taking him? he seems so different, etc etc etc".
What you want to do is hit the RESET button in this girls head. The only way thats going to happen on a relatively short time scale is if she sees you with better looking girls, working sets, being confident, etc. But again like hollywoodd said in his post before, basically once you open the door and walk through it, chances are you wont want to go back to your friend

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good luck[/b]