Have you all been to marriage counseling together?
For one, I would say mother in law needs to move out. That is a major stress factor and one that is no doubt adding unnecessary hardships. It would be a shame to lose a marriage and daughter over something like that.
What kind of effort are you putting in your marriage? Go open your Valentine's card, and show appreciation, really look deep into his eyes, think of the good times and give him a loving kiss. Take the time out to date each other, romance each other, hold each other's hands, cuddle. Go out at least one night as week on a date, and every night, say your prayers together, read some scriptures together, watch a tv series together, read a book together... hold holds, look in each others eyes and talk, laugh, make a game plan to become closer, more appreciative, more giving, less selfish, more thankful... be more communicative about finances and what you are going to do to become closer as a family, tell him your expectations of things he needs to help with around the home as well. These are things you both need to be doing, and you need to talk about them openly, calmly and sincerely.
If your mil cant leave the home yet, work on a time when she can. Also, you both need to confront her and let her know there are going to be some changes in the home rules. Also, try not to be as bitter and hard on her.
It sounds like you have emotionally checked out of your marriage.
Your husbands sounds like he also has major stress and the trouble sleeping and everything, could be depression, add that with the financial hardship and it is very common.
Let me tell you, we've been there. We lived with my in-laws for a while and it was very difficult. We were partially unemployed at the time, pregnant, college students, and almost divorced b/c we lost who we were as a couple through all of our hardships.
But really, this does not sound like a failed situation. It sounds like you have built walls to handle your stress and is possibly fighting your feelings for your husband b/c sometimes feeling empty is a defense mechanism when one doesn't feel like working on it anymore.
Have you two gone to marriage counseling together? If you both do and put in lots of sincere energy and get your mother in law out of the house, I promise you, this marriage can be salvaged if you are both open to each other. Before you can walk away from a marriage, you have to do everything you can to save it.
I absolutely love this short little video, it's only about 3 minutes long, but it really helped me when I was going through a time like this in our marriage.
http://www.youtube.com/watch?v=sQ1yLFIEVNo