My husband and I are both deaf and also licensed foster parents. Our deafness was never perceived as an obstacle (at least not stated so to us). I don't remember any questions regarding our deafness.
I am guessing that the agency you are working with is ignorant in regards to deafness. If they are asking how your wife would do this or that, I would go ahead and answer them and explain it would be the same as any hearing person. If you are looking to adopt a baby and they're worried about not hearing the baby cry, explain the technology available to make a deaf person alert to the crying, etc.. I would also ask the agency what their exact concerns are regarding your wife's ability to parent. That would allow you and your wife the opportunity to address and disprove each and every one of their concerns.
I assume the two of you had your physical/medical clearance by your doctors. (My husband and I had to do that). On that form, the doctor is required to list any medical conditions. He/she may have listed your wife's deafness. However, on that same paper, there should also be a statement that declares your wife fit to be a parent. Point that out to the agency; perhaps that may help.
As frustrating and offensive the agency's line of questioning is, I would save the lawyer until you are denied a child based on your wife's deafness. I'm not a lawyer, but I'm not sure they're breaking the law up until they deny you a child based on deafness.
Best of luck to you. Let us all know what happens.