It would be interesting to see photos of the actual watch that your sister found including the movement (the "works") and the inside of the case. Quite often the back of the case unscrews allowing you to see the movement, including any serial numbers and other markings (# of jewels etc). If I were you, I would certainly get a price of a new glass crystal to be installed. Let me know if you get any information regarding the watch in question.
I can see a little indentation which looks like the place you open the back but I don`t have the right instrument to do it. I have just tried to use a paring knife and have made 3 scratchs on it in my attempts which wasn`t a very good idea. It didn`t have a mark on it before I messed about with it.
A knife, 237SJ, is not a good "tool" to use, as you have learned:) Try a small flat blade screw driver; insert the blade into the indent; and then lift up and twist at the same time. Heating the case back with a hair dryer prior to doing this MAY help. In addition, you could soak a Q-Tip in WD40 and run it along the seam and let it sit for an hour or so before you try to get the back off.
If you are right-handed, wear a good glove on your left hand. This will control where the tip of the screw driver should go, and where it shouldn't go...Especially into your thumb or finger:)