reef,
It sounds as if her parents are more controlling than you are!
Which could be a very good thing. She may find living there so unbearable to her will, that she concedes defeat, and will do anything to get her life back with you and your daughter.
It could propel her into her rock bottom.
I would let her live with them and suffer for now. I hope they are unrelenting, unsympathetic, and merciless when it comes to her behavior. I can't think of a better punishment for an adult woman than have to answer to her parents again as if a forced back into childhood.
You didn't slip to hope...all humans hope, and without it, we would all sink into despair. You could though, turn your hope where it is most likely to find success--focusing on yourself and your daughter at this point.