Dear B. ~~ First let me say I really feel for you, this is a real heart ache, a real pity that children are treated this way, this whole thing is very sad. Please do yourself a favor and let yourself calm down and breathe and get some time alone to think and to clear your mind. I know that sounds easier than it is, but do it. Put this in prayer, real, meaningful prayer and let it go upward into light, into the higher realms so it can return to you with the answer to this predicament. If you're a prayin' woman and or religious, you may want to see someone that can help give you some comfort and counsel.
Now, you didn't say the ages of the children or whether these children are your sister's or husband's sister or what, but I suppose it really doesn't matter for the most part. The thing is with this situation, with these people causing problems and leaving the children confused and maligned, will only cause big trouble for your child, for all the children and for you and your husband. It already has affected your child, no matter how you look at it. In the big picture how will all this turn out??? Is it all worth it? Do you think you can work with these people so everyone can share and co-operate in raising the children so they can grow up with a sense of "normalcy" love and respect? If your answer is no, which it would seem to be, then let them take the children. They don't seem to show any sign of co-operation. They just think you're metteling and want control, when they want control and are doing everything in their power to get it. Let them have it. I know how horrible this may sound and how hard this would be but you may have to get really strong and let them go and let it be. You've done everything you could do, right. You say you need to take a stand and move forward. Do it. Your child needs a whole mother not one exhausted with the games and torment these people are putting you through. Do not let guilt come into play or confusion, anger or regret, just drop it all. Let them live their lives. Live your life and reconnect with your child and rebuild your family. Let the other children go in love, let them know you love them but have to let them go.
This is basically my opinion, I could be completely wrong. But if things are as you say, I'd be willing to bet I'm not, if I could prove it. Easy for me to say and I don't know you and I'm just a stranger typing out words. But then you can take or leave them as you choose. My advice for what its worth, above everything, is to pray and ask what is the outcome of this, what is the worthiness of it all, is it meant after all of these years to now let go? You have to find your own answer.
I hope all will be well for all and all manners of things will be well and I pray you find your strength and answer and strength in that answer and find it soon in The Light and Love of The Divine Source.