The sound engineer, who was married to the star for four years, is suing over passages in Sir Elton's 2019 memoir Me, and the hit movie Rocketman.
Ms Blauel claims these revealed details of the marriage, breaking an agreement they made when they divorced in 1988.
The disclosures triggered long-standing mental health problems, her claim said.
In response, Sir Elton's defence acknowledged the existence of the divorce agreement, which both parties signed, but denied any breaches or causing "psychological harm".
According to papers filed at the High Court in London, Sir Elton agreed to remove certain passages from his autobiography before it was published last year, and in the final draft, Ms Blauel only appears on eight pages.
Sir Elton describes her in positive terms throughout the book, calling her "dignified", "decent" and "someone I couldn't fault in any way".
However, Ms Blauel claims some of the remaining passages "seriously misrepresented the nature of their relationship".
For instance, Sir Elton claimed in his book that he did not enter their marriage with the intention of starting a family. Ms Blauel contests that they "did attempt to have children during their relationship but were unable to do so".
A request to have this passage removed was rejected, according to court documents.
She also claimed not to have been consulted about her appearance in Rocketman, in which she was played by Celinde Schoenmaker - although the marriage took up less than five minutes of screentime.
Ms Blauel also said that, following the release of the movie and the memoir, a journalist had "been trying to locate her in her local village", causing her "great anxiety".