How do I deal with my nightmare?

You're right, this is a nightmare. Believe me, I've been through much worse. But pray until you get a word from the Lord about what to do. And pray for this child. I know the girl needs lots of love she hasn't been getting and has felt abused, and you got caught in the middle. I pray the mother will stay home with the children now. Too many mothers work and leave their children with people who don't love them at all like a parent would and sometimes abuse them. The Lord will forgive you for anything you didn't do perfectly. The child just needed more love than being dropped off in her crib when she had been hurt so much, but of course you had no way of knowing what exactly she had gone through so that made it hard. God bless you, and I hope and pray all will be resolved in the Spirit of the Lord!!! Pray for what (or when or at all) to say to the couple upstairs and the Lord be with you! Take comfort that the mother doesn't hold anything against you. Perhaps she feels her husband was being too harsh in the situation.