Have you seen her in a swim suit? It sounds like she has body image issues (maybe just of the vaginal area), but you need to make her feel comfortable with her body and showing it to you, with the lights on. Maybe you two could take a shower together or something.
I would be looking into some therapy/sex therapy to help her get over any problems she has with intimate acts. If she doesn't want to do that, watch enough porn to desensitize her.
