Oh boy, do I EVER have experience with this. One of the babies I used to have licked himself bald from the middle of his sides all the way down to his toes. Anywhere he could reach he licked bald. My vet called it a nervous breakdown
but it sounds much like what you are describing.
Meds just made him sleep all day, and he refused to eat, so we had no choice but to take him off of them, and he resumed licking almost immediatly.
We never could pinpoint a specific thing that was stressing him out, so we decided to seclude him, and slowly re-introduce him to the house. We put him inside a large dog crate inside our storage closet, we also spoiled him quite a bit, played with him alot, and made sure he had all the toys and treats we know he liked. He was in there for about a week, we let him out at night for a few hours when the house was totally quiet, we dimmed the lights, and just had some "calm time" with him.
Slowly we started letting him out more and more often, we kept visitors to a minimum, and tried not to change his routine much. I think it took about a month to reintroduce him to the house, but we never did have another problem with him chewing on himself.
If you live in a populated area, you may be able to find a behavior expert in the phone book who can give you a better idea of what is stressing her out with a few home studies.