My tv got screamed at for that very reason

I've always seen the lapped runners move over. I think you should have the option of bumping them off the track like roller derby.

As you say, the 2nd lane would actually be about 10,150 meters (using lane marking, not center of lane)
If you convert her time to 10,000 meters (1st lane), it would be just under 32 minutes and would have won.

Of course the same argument could have been made for the other runners, because even the winner wasn't in the 1st lane the whole race.

She may have been better served to have moved inside either by passing or dropping back (which runs the risk of getting boxed in) - especially at that distance