There have been reported cases of reactions to Frontline but, really, any animal might react to any medication. In the future, I don't think I would use a topical treatment but check into one iPod the oral meds.
That being said, those medications go into the glands. At this point, I would be concerned some type of infection is going on and think you should have her checked by your Vet. He may want to do some blood work and skin scrapings and put her on some medication. Sounds like she is miserable.
Some dogs (and cats, too) are EXTREMELY allergic to flea bites, and this could be the case with your lab. All it takes is one flea and they will bite and scratch themselves raw. I have a cat like this. All of my cats are indoor-only cats but, of course, my dog has to go outside. I treat everyone with FrontLine TopSpot but the thing to keep in mind is that these preparations don't repel fleas, they KILL them. The fleas still have to bite the animal to die. While the animals are not nearly as attractive to the fleas with the flea treatments in/on them, it's not impossible for a flea to get on them and bite. It might be a case of your dog developing a hyperimmunity to the flea saliva and as a result, its body reacts this way when introduced to even the tiniest amount of it, especially after a severe infestation. Of course, it could be that it's not related to the fleas at all, so it would be a good idea to have the vet do a skin scraping just to make sure you're not dealing with mites as well, because it IS entirely possible that another parasite was able to set up house when the lab's skin was so badly irritated from the fleas. Please keep us updated.
Ghilly