The Saga of Marsical Mae

I have a little problem... Literally. She's about 7lbs. Her name is Marcie, and she is cute as hell. She also pees on things, and craps in dark, far away corners. I have never been the type of person who tolerates such behavior from a mere animal, whom I have graciously allowed to co-mingle with me - so I have what one may call a dilemma.
Now, I am fully aware that there is a learning curve in the canine brain-bladder/poophole connections. I understand that as the intelligent and reliably reasonable mammal, I alone assume the burden of responsibility when it comes to instilling and enforcing the value of eliminating out of doors. That being said, I am coming very close to the line in the sand that separates my success from defeat. Picture Planet of the Apes, only with Yorkshire terriers and lots and lots of poop...
She loves peeing outside, and on occasion she appears to enjoy pooping out there too. But, here's the kicker - carpets are good too, so's the couch, and the wood floors, Evan's lap... you get the point. She has even taken to soiling her little soft fluffy kennel blanket and then cuddling up for a snooze. And I wondered what that interesting smell was coming from, though I must admit it is a perfect match for her ever-present halatosis aroma.
What to do, what to do...
I have tried the systematic and intelligent approach first. More kennel time, more potty breaks, more supervision, the implementation of a schedule... 3 months of this!
Yeah right. That worked like a lead balloon flies.
So, no more Mrs. Nice guy! I'm cracking down. She is banished to an itty bitty little Marcie sized kennel, no more lap of luxury for her, speaking of which, no more soft and fluffy kennel blanket either - it's cold hard plastic for this little pup. I have committed to four regular outside trips during the day, where she will have 7 minutes to do what she is going to do, and then back to her prison she goes. At night she will have one small cup of food, and then she is on Kristin-arrest, where I go, she will be - no more running off to dark corners...
Which brings up another point, when I caught either of my two big dogs in the process of peeing in my house, I raised my voice! I said no! I dragged them outside to finish the act! And it caught on, "that wasn't any fun, maybe I won't do that again!" And they didn't! But with Marcie, I raise my voice, she pees harder, I say no! - she may poop a little on top of it, and if I take her outside to finish the job, she will have finished all over me by the time we get there... She is an emotional eliminator...So I am yet undecided on how to handle those caught-in-the-act moments...
Well, there you have it, my plan! I will update you on my progress.

P.S. There is one small detail I left out, I broke down and invested in some puppy pads. The internet told me that is how you solve a yorkie's housetraining problem - lay a diaper on the floor and give up entirely on the outdoor thing. Well, I'm not giving up, but I am tired of cleaning up after her, so in this hypertraining period of which I am embarking, don't mind the dog diapers scattered around my house!