Your wife is right. That is not a possible construction. A pronoun can be used in that position, but not a personal pronoun used for the person to whom you speak (te, vous) nor for the person who is speaking (me, nous). "La" could be used if speaking of the "lended" person to somebody else. We'd have this following sentence.

• Ils nous la prête.

If you want to say it to the "lended" person other forms are possible but the same participants can't be used in those forms and the context can be slightly different.

• Tu nous est prêtée. (There is no reference to who is doing the lending.)
• Ils nous prêtent toi. ("toi" (you), rather than somebody else; so the context must be a little different.)
• Ils nous prêtent quelqu'un, c'est toi. (close rendering)
• Ils nous prêtent quelqu'un et c'est toi. (close rendering)

I can't assert why this is so but I have the strong intuition that usage is the sole reason.

Your wife is right. That is not a possible construction. A pronoun can be used in that position, but not a personal pronoun used for the person to whom you speak (te, vous) nor for the person who is speaking (me, nous). "La" could be used if speaking of the "lended" person to somebody else. We'd have this following sentence.

• Ils nous la prête.

If you want to say it to the "lended" person other forms are possible but the same participants can't be used in those forms and the context can be slightly different.

• Tu nous est prêtée. (There is no reference to who is doing the lending.)
• Ils nous prêtent quelqu'un, c'est toi. (close rendering)
• Ils nous prêtent quelqu'un et c'est toi. (close rendering)

I can't assert why this is so but I have the strong intuition that usage is the sole reason.