As a landlord, I'd say take them to court for the rent & utilities owed. Hopefully you had some kind of paperwork (lease & other documents) during this time?? If not, take it as a hard lesson learned that you must document everything!! You may still be able to sue for the amount, but it will probably be a little more difficult to prove the total amount due.
If (or should I say WHEN) their new place doesn't work out... you and hubby need to have a serious conversation about how far you're willing to help them out (again). With any luck, they'll move out quickly and you'll be able to get the place cleaned out and re-rented soon! If you've never done the landlord thing before, there are some great resources online--pay attention--it is all very legal and you don't want to get stuck in another bad situation!!
That was the practical side of my answer (not exactly what you were asking for). As for the "forgive & forget," personally I would have to clear up these legal & money issues before I could get to that point! I love my sisters, and have only loaned/paid for minimal amounts to them--and that was a hard lesson for me--when it comes to family you can't do something like this without the understanding that it may never be reciprocated or appreciated. You do it because you can and because you care. If it's too much for you (you don't have the money, time, etc to do it), don't do it! I still have hurt feelings about the way one of my sisters took advantage of me & DH! As for the younger sister, I just don't let myself get in that situation. I know she could probably use the help, but until she can figure out her own life, I can't get tied up in her messes.
Good luck, dealing with family on these terms can be really tricky (and emotionally trying).
*Added*
Okay, no court. Scratch my entire response, then. Yoga is good, but it should be a "regular" event--not just when you need "stress relief." Do you exercise? That's one way I can make myself feel better when I'm ticked off about something--especially the kickboxing or tae bo videos!! Other ideas (some of which I tell myself I should do, and others that I actually do do): Go for a run, read a book, watch trash TV (soaps), eat chocolate, go for a swim, do yardwork, window shop, bake goodies, space out online, play a game, savor a smoothie/milkshake, clean house.