Your vet will be able to tell you more with x-rays, but both of our litters, our 3.5lb female needed a c-section. (She only had 2 pups both litters- first one we caught in time, or she would have died...the first pup was breech - he didn't make it- and we had to take her for an emergency c-section.) The problem is that the puppies grow to large, and they can't fit through her birth canal.
I really hope that she is okay, and that it gets figured out. Just as a reference, both c-sections were right around $1300 total here in Las Vegas. Hopefully you live somewhere much cheaper!
P.S. We didn't know that she was too small to breed, even after talking to the vets and stud owner. Now that we know, we won't be breeding her of course.