Hi Penny
The first thing that leaps to mind is Minor Bupleurum, probably teamed with turmeric. We would probably just add 18g of Yu Jin or Jiang Huang to 100g of Natural Path granular extract if the dog were in our clinic, but Kan's Open the Canals of the Liver exists in liquid and tablet versions and contains this mix. The only herb I know of containing compounds that has been shown to kill nerve sheath tumor cells is turmeric.
So why put it in Xiao Chai Hu Tang? It is an anti-cancer formula in its own right and enters the GB channel. The focal atrophy you're seeing indicates a blocked channel, and the only channels running through that area are the BL and GB channels. XCHT enters the GB channel and so would help with GB channel problems, so it makes sense from both perspectives.
To know for sure it is a GB channel problem, recheck the dog and see what happens to its pulse when you sedate or tonify important GB points like GB 34 and GB 20. If you can get the pulse more moderate with one of those, then you have your Chinese medical diagnosis. Otherwise, try BL 40 and BL 10. One of these two sets of points should improve the situation.
If it turns out that the BL channel is the one with the obstruction, then I'd probably start with something like Xiao Huo Luo Dan. The Natural Path version contains Turmeric, and it opens the channels, suggesting its worth in a tumor case which appears, from a Chinese medical perspective, like a channel obstruction.
I hope all that makes sense! Let us know how it goes!
Steve