In this paper we analyse a predator-prey model where the prey population shows group defense and the prey individuals are affected by a transmissible disease. The resulting model is of the Rosenzweig-MacArthur predator-prey type with an SI (susceptible-infected) disease in the prey. Modeling prey group defense leads to a square root dependence in the Holling type II functional for the predator-prey interaction term. The system dynamics is investigated using simulations, classical existence and asymptotic stability analysis and numerical bifurcation analysis. A number of bifurcations, such as transcritical and Hopf bifurcations which occur commonly in predator-prey systems will be found. Because of the square root interaction term there is non-uniqueness of the solution and a singularity where the prey population goes extinct in a finite time. This results in a collapse initiated by extinction of the healthy or susceptible prey and thereafter the other population(s). When also a positive attractor exists this leads to bistability similar to what is found in predator-prey models with a strong Allee effect. For the two-dimensional disease-free (i.e. the purely demographic) system the region in the parameter space where bistability occurs is marked by a global bifurcation. At this bifurcation a heteroclinic connection exists between saddle prey-only equilibrium points where a stable limit cycle together with its basin of attraction, are destructed. In a companion paper (Gimmelli et al., 2015) the same model was formulated and analysed in which the disease was not in the prey but in the predator. There we also observed this phenomenon. Here we extend its analysis using a phase portrait analysis. For the three-dimensional ecoepidemic predator-prey system where the prey is affected by the disease, also tangent bifurcations including a cusp bifurcation and a torus bifurcation of limit cycles occur. This leads to new complex dynamics. Continuation by varying one parameter of the emerging quasi-periodic dynamics from a torus bifurcation can lead to its destruction by a collision with a saddle-cycle. Under other conditions the quasi-periodic dynamics changes gradually in a trajectory that lands on a boundary point where the prey go extinct in finite time after which a total collapse of the three-dimensional system occurs.