You're remembering correctly.
Victoria Principal as Pam exited the series at the end of Season 9 (season 10 on the DVDs) when her car crashed into an oil tanker on the freeway.
Every time she appeared after that, she was just some extra wrapped up in bandages before Pam disappeared. Her explanation in the series for her leaving Bobby, Christopher, Cliff and the rest of the Ewings was simply that she was left horribly disfigured by the car wreck and didn't want them to see her that way - it would be easier for her to know the remembered her as she was, not as she now would be.
Not long after, Margaret Michaels showed up on the show as a love interest for Bobby, who was totally in to her because of her obvious resemblance to Pam. He had a brief affair with her but ended it because he realized it wasn't fair to Margaret Michaels' character.
About a year or so later, Cliff tries tracking Pam down, and actually finds her, this time played by Margaret Michaels (now actually playing Pam instead of her doppleganger). When they finally sit down to talk, she tells him she doesn't ever want to see him again but also that she doesn't want Cliff to tell Bobby or Christopher that he'd found her. Soon after Cliff leaves, Pam's doctor/fiance steps out of the shadows asking her why she didn't tell Cliff that she was also dying.
So, again, while soaps sure do like to pull this crap with us about killing people and then bringing them back, the ramifications on the Ewings would be huge and honestly, they did everything they could in 1988 to get rid of Pam without actually getting rid of her. And honestly, I doubt very much the writers of nuDallas would go to all the trouble of explaining all this away if they couldn't get Principal back for it, regardless of how little sense it would make to have her back after the Margaret Michaels episodes.