When she first put up the gate was the time you needed to go to the city, whether locked or not. You waited too long. She could claim to the city that she had closed the alley for whatever amount of time and no one objected. It's close to letting your neighbor use a piece of your property and to maintain it without anything in writing. Eventually, the neighbor can claim the property as his.
I guess I was stupid, I thought no one would be that bold as to lock the entire block out. What a fool I am!
I'm not an attorney, but I am a real estate broker and it seems you do have several options open. I'd just forget it for now, enjoy the evening and chat with a few neighbors next week or after the New Year to see if they will join you consulting a lawyer. Probably also be best to find a "Real Estate Attorney". Find one who confines his/her practice to real estate matters. Merry Christmas !
Nam Vet (well fed and 'watered' late Christmas day .... excuse all typos and bad grammar)