HI there, this is Dr. Elaine
I'm very sorry to hear about your chihuahua.
Labored breathing in an older dog can often be secondary to heart disease
. The lungs can fill quickly with fluid. Sometimes there is no coughing, but the head position and effort you describe are very worrisome for her suffering.
If she has pulmonary edema (fluid in the lungs) often an injection of a diuretic like lasix (furosemide) can help rather quickly. many times oxygen must also be provided. Obviously this means a visit to a veterinarian.
Making sure she is not overheating is crucial, being it is the hot summer and all, and when patients are having a hard time breathing to begin with, heat only makes it worse.
are likely cold due to poor circulation--this may be secondary to heart problems/ congestive failure. Congestive heart failure can develop very suddenly, even though in most cases the heart itself has been getting weaker and weaker over time, until it can no longer compensate.
This does not have to be what is wrong. Other things like infection (pneumonia), cancer, asthma, are also seen in dogs, but heart disease is most common.
I think it is perfectly reasonable to want her to go peacefully in your arms, but that may not be possible at home when she is so labored. Although not as intimate as at home, euthanasia at a veterinary office can be done with little stress to her, in a private room, with sedation to alleviate her labored condition.
I wish you the best in a situation such as this. Peace be with you. Pleaser let me know if I can answer anything further.