Unfortunately, you got your Yorkie from a puppy mill. Terry Warren is listed on the USDA "puppy mill" list under Missouri:
http://prisonersofgreed.org/ListA2006.pdf
As CharBar said, it is "buyer beware" when buying a puppy from the internet. It's always important to screen a breeder beforehand which includes checking the USDA list.
Puppy millers don't care about health testing the parents or breeding to the Yorkie standard which is why their puppies are usually pretty far from the standard and have lots of health problems. They are only interested in producing as many puppies as possible for as little money as possible.
Two years later you really don't have any legal recourse against the breeder, unfortunately. If you can't afford the surgery, there are organizations that can help. There is a stickie pinned at the top of the Sick/Injured/Emergency section with a list of resources for financial assistance.
If getting the surgery is not an option, I think you are right to consider giving her up. If you turn her over to a Yorkie rescue, they can help her get the surgery and find her a wonderful new home.