Answered by Alex Beam:
I did an Internet search, and consulted the site run by a man who catalogues decommissioned hospitals (www.darkspire.org), and could not find Retreat State Hospital. I did, however, find a reference to a Pennsylvania state document turning a hospital of that name over to the Department of Corrections, implying that it is now part of the prison system.
I think that the shock treatment you describe was electric shock, because it was so common in state hospitals during the 1950s and 1960s. So-called Metrazol shock was in disuse, and I don't think insulin/coma shock was all that prevalent then. I am very sorry to hear about her memory loss, which, as you yourself may suspect, could have been induced by an excessive number of shock treatments.