Mom's POA is showing signs of dementia / Alzheimer's. What are our options?

Is she also the caregiver? If so, the apparent signs of dementia could also be burnout.

That is up to your mother. Is your mother competent to assign another POA? Or was there a alternate POA named in her advance directives? If she is not competent and no alternative was named, the only route would be a guardianship if the POA is unable to perform her duties. If she is competent to assign another POA, then no problem.