My 14 year old Lady was diagnosed with KCS/dry eye three years ago.
Did your vet test Lola'a tear production? KCS is very easy to diagnose this way. The vet just sticks a little strip in her eyelid and it will register her tear production.
What drops did you try? Cyclosporin (Restasis) is most commonly prescribed. There is a fairly new tear stimulator on the market called Tacrolimus that has been effective where cyclosporin has not. For Lady Tacrolimus has been a "miracle" drop.
KCS can lead to blindness if not properly treated. Corneal ulcers are common w/dry eye and scar tissue builds up over time which will cause loss of vision. In addition to a tear stimulator, artificial tears must be used constantly. I have found Genteal Severe Eye gel to be the best.
Here is a link to a great article about KCS. It even shows a picture of the tear test and discusses surgical options.
KCS (Dry Eye)
Lola really needs to be seen by a veterinary opthamologist. I am surprised your vet hasn't already referred you to one. Our general practice vets just don't have the equipment and training to diagnose and treat most eye conditions.
Here is a link to the American Veterinary College of Ophthalmologists. You can look up doctors in your area, although you will most likely need a referral from your vet.
ACVO