Hmm I tried
breaking the mirror prior to killing her and got some kind of nasty curse. I wonder if doing the same thing after she was dead would be different?
I think breaking mirrors give you bane in general. Very superstitious in that case (haven't tried extensively).
I think the solution -if any- is something of a puzzle; related to the potions you find in Ethel's laboratory, or whatever hags call that room. The Basilik Extract is obvious; the headless guy is probably beyond saving.. But the mirror guy? I'm going to try again. Some Clerical spells might do it,
Like Kraydenvar said, killing Ethel will solve it. If you use basilisk oil before killing Ethel the poison is still active and the dwarf will die.