I've seen this happen a few times at my office, although thankfully the one person I hired that was a personal reference seems to be OK.
You will be looked at (for better or for worse) as someone who recommended her if you're listed as a reference, they know you, and they get hired. It will also be obvious that you two are friends to your coworkers when she gets hired - and you two will be connected, whether or not you want to be.
In my opinion, your best bet is to be honest with her. Let her know that while you want to try to help her get an awesome job at the University, you're worried about her particular fit in this department. Explain that you think the work environment might not be the best for her and lead to conflicts that would look bad on her, whether or not it's her fault. Give a couple examples from the previous role of where the work environment is similar. Also explain to her that you'll tell them all the awesome parts of her, but that, due to your position as an "insider" in this org, you also have to be honest about your experiences in a similar work environment in the past.
If she's a good friend, or a professional worth hiring, she'll understand.