Boy - that's a really tough one.
Have you tried some "associate each other with good things" tricks? ...rubbing Pepper all over with a wash cloth or clean rag, and putting it under Heidi's food dish? Rubbing Heidi all over with a wash cloth, and putting that under whatever food dishes Pepper eats from? Then do the same thing - even a couple of times a day - every day (rubbing each kitty with a dry wash cloth or whatever) and putting treats on the cloth? (With Heidi's smell on it for Pepper's treats, and Pepper's smell on it for Heidi's treats). Be religious about it, and do it for a month... or months...
And why was she returned to you? Just because she was so shy?
We have kind of the same problem with Spooky and Tuxedo, though not nearly to the same extreme. I wrote up Spooky's story here: http://www.thecatsite.com/forums/sho...d.php?t=118192
She is so scared of other people, but loves us to bits. She did accept Gary's mom (after her visiting several times a year for four years). She's never had to hide in one room from Tuxie - but we did live in an RV with three cats for one year and a total of five cats for another year before moving into a house. The kitties were really happy in the RV - so there were five cats and two people in a place that was 37 feet long and 8 feet wide. Probably not much larger than your bedroom? Almost every pic I have from those days one kitty is snuggling with at least one other kitty. Once we moved into the house, they all spread out, and they don't cuddle anymore.
But once Tuxedo recovered and became alpha kitty, he started chasing Spooky. It seemed to us like "just because." We needed to settle down, and we figured the kitties needed more space. We rented a house. And once all the kitties got used to it - Tuxedo resumed chasing Spooky. Just because. She'll be lying on the end of the bed, Tuxie will come in, and lunge at her, swat her, and she'll bolt. Often he'll fly after her, and she'll go hide in a tent in one of the rooms. So our getting more space for the kitties didn't solve that problem!
It's hard on you, spending so much time in the bedroom. But even if it's just a few hours a day, and you spend time with her - petting if she wants it, or playing... basically making sure she gets some stimulation... it actually sounds like a wonderful life compared to what she would have.
Is there any way you can hang a bird feeder outside the window? Our kitties love sitting on a window perch watching birds. We've also placed cat trees in front of a number of windows and put bird feeders outside. They attract squirrels too - but they love watching squirrels as much as they love watching birds.
Just ideas for more stimulation...
I mean - kitties are territory oriented. Heidi has a small territory - but it's nothing like a cage! And she obviously has so much love for you - it just radiates out of that picture.
Have you already tried Feliway and Rescue Remedy or Multi-cat Harmony flower essences? http://www.catfaeries.com
Another thing to try. Does Heidi like catnip? Let her drool and rub all over a catnip toy. Once it dries, give it to Pepper. It'll be catnip, which he probably loves - but with Heidi's smell on it. (Another "associate the other kitty with good things" trick).
Any way to entice Heidi out of the bedroom if Pepper is confined to another room for a few hours a day? Maybe if she gets used to the smells without being attacked, and Pepper gets used to her smell being around other parts of the house this could help?
I guess her love for you doesn't mean she won't be able to love someone else as much. But since she's already been returned twice.... I think this will make it more difficult for her to accept someone else. Maybe there's a young grandma widow out there with the patience for a shy kitty and she'd be an alone kitty. That seems like it would/could be a perfect situation. But if it doesn't turn up, it seems to me like Heidi has a great life full of love.