I'd put together a little gift basket for the cranky neighbor. Nothing fancy, a few little snacks, maybe a cheap bottle of wine if she drinks, and most importantly some EAR PLUGS.
Take the basket over to your neighbor and explain that you have a new puppy in the home, explain how you came to have this puppy (sad story should tug at even the most cold of hearts), and why the puppy is crying at night. Ask her to please bear with you, remind her that the noise is even worse for you, and if you just wait this out, it shouldn't last for too much longer.
The worst that can happen is she'll still be pissy about the situation. The best that can happen is she'll be a little more understanding, even if she doesn't like it.
If possible, I'd try putting a thick comforter over the crate to insulate/noise-proof it a little (make sure the pup doesn't overheat, though).
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