I've testified often in family court. I don't know if conservatorship issues are handled in family court. If I were you I'd ask Lydia what it is she wants the court to hear from you. I'm guessing it's to be a character witness. Sounds like you've not had contact with her for a year which means anything you say will not be very useful.
I'm not even sure what conservatorship is in this incidence. Is she asking to have financial control? Or decision making rights? If she's asking for custody, it would be a custody hearing. I urge you to first find out what the purpose of the hearing is and how your testimony applies to it. I'd ask to talk with Lydia's attorney.
I would be comfortable saying that I don't know her very well because I've had very little personal experience with her and I haven't had any contact with her for a year. Tell Lydia how much you appreciated her help and that you'd be willing to testify if you knew ahead of time what it is that she expects you to say.
Often the client doesn't understand the system or what is required. Therefore I would definitely not commit myself before talking with her attorney to find out what she is going to ask you and what the other attorney could ask you. Be prepared.
If you testify, as others have aptly said, tell the truth, answer only the question asked as briefly as possible and do not mention hearsay. Even if an attorney asks for hearsay or your opinion say that you're not comfortable repeating gossip and that you have no opinion.
Please do not feel obligated because Lydia helped you. Be true to yourself.
After your edit: Just don't answer hypothetical questions. You don't know her well enough to have a helpful opinion. Say something like, "I don't know her well enough to answer that question.? or even "I don't have an opinion on that."