This isn't using the books, but you can have her start as a less-powerful nereid by simply not giving her the racial Hit Dice. She'd still have the +3 LA, of course, but at least it'd have the total ECL.
Having said that, I think the special powers of the nereid are going to be somewhat problematic. I'd go with a story-change of making her a nereid who has lost her connection with the Plane of Water, and so make the following changes:
She's now a Native Outsider, rather than Extraplanar.
She's lost her Drown power.
Her air breathing spell-like ability is now always active, and affects only herself (since she's still aquatic and all).
Stagger her other spell-like abilities so that they're gained when her character level equals the minimum caster level to normally cast those spells.
I'd also recommend getting rid of her displacement power, simply because having to make a 50% miss chance roll whenever she's attacked will become overpowered (and annoying) very fast.
Finally, reduce her dependency on her shawl. Make it so that if it's lost she's sickened, and if it's destroyed she's stunned for some period of time (not long, but enough to be serious) until she can make a new one, which shouldn't take more than a day.
I'd say that that'd reduce her to about LA +1, though I'm just eyeballing it. If you want to get her down to LA +0, I'd add a further reduction to her ability scores - change them from Str -2, Dex +6, Con +2, Int +2, Wis +2, Cha +6 down to Str -2, Dex +2, Con +0, Int +0, Wis +0, Cha +4 (in other words, a net reduction of -2 to each ability score, with Strength's penalty moved over to Dexterity, on top of the normal reduction to Dex, so as not to hit her with a crippling Strength penalty).