How did she misinterpret/misappropriate Nietzsche?

She read at least one book:

In addition, Justin Raimondo has observed similarities between Atlas Shrugged and the 1922 novel The Driver, written by Garet Garrett,[15] which concerns an idealized industrialist named Henry Galt, who is a transcontinental railway owner trying to improve the world and fighting against government and socialism. In contrast, Chris Matthew Sciabarra found Raimondo's "claims that Rand plagiarized

She thought his work was all about rugged individualism, but claimed he led to nihilism. Neither statement is true but is what was commonly believed by Americans and Brit's prior to Walter Kaufmann's translations and defense of his work. See Bertrand Russel's terrible book A History of Western Philosophy to see basically the same bad criticism of him as Rand.

She also thought his work was primarily about egoism AKA a more literary Stirner, this is a highly reductionist view of his work to say the least as it leaves out his views on epistemology, anti-metaphysics, morality, ETC

what went wrong, was it his bestial view of humanity and the individual?

Got that right…

"The necessary consequence of man's right to life is his right to self-defense. In a civilized society, force may be used only in retaliation and only against those who initiate its use. _All the reasons which make the initiation of force an evil_, make the retaliatory use of physical force a moral imperative."—Ayn Rand, Virtue of Selfishness (emphasis mine)

"Racism is the lowest, most crudely primitive form of collectivism"—Ayn Rand, Virtue of Selfishness

BUT THEN

"Any white person who brought the element of civilization had the right to take over this continent"—Ayn Rand, 1974 West Point lecture

I think she was opposed to Ethnic Nationalism, but supported imperialism.

it still contradicts tho

...

Rand wasn't Ancap and didn't follow Rothbard's NAP. Objectivists are their own (much more autistic) thing.
t. Occasionally lurk >>>/liberty/

so what do objectivists want?
I'm to lazy to read up on their shit

Pretty much hardcore right wing minarchism or neoliberalism depending on who you ask

This but most people see it as being lolbertarian. They believe mostly the same things except objectivists have to accept Rands dumb beliefs on philosophy, art and psychology.

Objective morality
Free Will
Naive-realism in metaphysics and epistemology
Romanticism is the only objectively good art, James Bond is the pinnacle of western cinema.

Get back to studying Muke

She didn't read Stirner like Nietzsche.