im not sure about that, its is making a copy of your work but in another medium (BTW film to digital doesnt count ,its illeagla to d o that) from what i know of public domain copyrights as long as you make a noticeable enough change your not in violation of the law. personally i would work with the artist on a comprimise for acknowledgement that they are using your photo in different form (i would personally ask for some compensation if she sells it) what you could do is work with the person and when shes done have the image and the painting on display together, because that could raise intrest in a buyer wanting both or a person wanting a copy of the painitng or the image if in any case it raises the likelyhood of both of your names getting out , which inturn would raise your sales
FWIW
FWIW