I set up Tiggr (or Brad did) to run ITA/E, but steet legal so I could drive to events.

Bad idea. Driving to (or from) events.

I'm thinking of getting a car dolly; don't need such a big tow vehicle, doesn't take up huge amounts of space in the side yard, and would work for racing unless I severely bent the car.

Any opinions? Suggestions?

As you have already figured out, there might be times when driving home is not possible. The car dolly or tow bar is a good low cost alternative but there might be times when the car can't be towed on the ground which is why most racers end up getting a trailer. Although more expensive, used open trailers are pretty reasonable and give you a place for extra wheels, gas cans etc. Over the past severala years I have seen several racers that flat tow have to get AAA or someone with a trailer to help them out. Good luck.