Your sister owes you the money, but if she genuinely doesn’t have it then I’m not sure what else you can do. I’d have to say YTA for demanding your parents to pay for it. They’re trying to mediate a situation between their daughters. At the end of the day this is a dress vs. your family.

The fact that you’re currently staying with your family FOR FREE ought you tell you that money between family is not handled on a transactional basis like you’re trying to apply to this situation. Your sister is a bad person, but work it out otherwise you’re going to lose out. If you want to ruin her life over a dress then be your guest, but ask yourself if it’s going to make your life any better.