Here it is in several sentences:
Some people had known her before. They expected that she would have a horrible cloud around her that would dim and obscure her. What actually happened was that her beauty shone out. It even made a halo from the misfortune and ignominy (disgrace) around her. This astonished and even startled them.
This is a metaphor, of course. Nobody expected a genuine cloud with rain around her. Her beauty didn't literally emit light, nor did she have a halo as in religious pictures, and the halo she didn't have wasn't made of misery. But metaphorically they expected her to have done terribly and to be miserable and ugly, but instead she was beautiful and happy and admirable.
This is reminding me of What Katy Did and other books of that era, which I generally detest as an adult precisely for sentences like that, both their construction and meaning, but that is just an aside.