I don't quite understand why Maid of Stress is so disturbed by this...as a good friend to this person she should have had SOME sort of inclination that something like this could happen. Also, it's not like the bride is forcing only her to wear a chicken costume with a giant spotlight the entire time. Lots of other people will dressed like that too! She's not going to get any undue attention aside from the fact that she's the maid of honor and gets to make a speech.
Yes, your friend should have told you from the get go, but at least now you can control what character you go as (there are TONS of cartoons that have adorable costumes and hair that wouldn't make you look like a fool. You don't have to choose Oscar the Grouch.) instead of buying a terrible dress of the bride's choosing.
When it all comes down to it, it's your best friend's day and she wants you to be a big part of it and support her. Especially after you have already agreed, I think backing out now would be terribly rude and hurtful to your friendship unless your friend is very, very understanding.