"maybe that was just P.R. management if that stuff about her monetary and creative control demands is true." Yes, I think the "record label refusing to let her perform" excuse is kinda like "artistic differences", or "vocal problems", The Distinctive Baritone. Phrases that are sometimes used to save face.
Her manager, Kenny Laguna, said a lot of things at the time that displayed an inflated sense of ego. Things like they wanted control over the recording so they could be sure it was "up to her standards". Can you imagine any other actor in a small role whose contribution on the recording consisted of only a short guitar solo, and only a handful of her own lines making such demands?
The official line in the end was that they "could not come to terms" with the producers. I think Laguna did not serve her well in this case. She came off looking like a spoiled prima donna.
Playbill story.