In the two months since a racial scandal wrecked Paula Deen’s reputation and sparked the swift demise of her multimillion-dollar empire, the celebrity chef has kept a low profile at her Savannah home. “She wets a hook and goes fishing. She stays in her garden,” says friend Suzette Dupuy Wagner, 46. Adds her sister Amy Dupuy Martin, 40: “A couple of weekends ago, [her sons] Bobby and Jamie came over with all the grandchildren. We sat around and sang ‘Old MacDonald.’ She enjoys being with friends and family.”

On Aug. 12 Deen, 66, found another reason to smile: A U.S. District Court judge dismissed the racial discrimination complaint filed against Deen and her brother Bubba Hiers by ex-employee Lisa Jackson, who is white. “At best, [Jackson] is an accidental victim of the alleged racial discrimination,” the judge ruled. (Jackson’s lawyer did not return calls for comment.) When Martin heard the news, “I called Paula, and she said, ‘A weight has been lifted off of me.'” A rep for Deen told PEOPLE in a statement, “We are pleased with the court’s ruling … As Ms. Deen has stated before, she is confident that those who truly know how she lives her life know that she believes in equal opportunity, kindness and fairness for everyone.”

But the jury’s still out on whether Deen can bounce back after admitting in a deposition made public in June that she had used a racial slur and once discussed a “plantation wedding.” “The damage is done,” says David E. Johnson, CEO of branding agency Strategic Visions. “What really got her into trouble was using the N-word. The image is still out there: She is out of touch.”

What keeps Deen grounded is her husband, Michael Groover, 57. Contrary to reports their marriage is in ruins, Wagner says, “they’ve grown stronger than you can imagine.” Though a Deen source says she declined offers from reality shows such as Dancing with the Stars, the TV chef plans to ease back into the spotlight with a Houston food expo next month. Says the source: “She can’t wait to see all her fans and start cooking.”