A silver lining: The extended, uninterrupted time with DD8 without the every other week visitations at dad's means that we have been able to do some really fun stuff together, including a short road trip, and even met a new neighbor girl to play with.
I can't remember what state you're in but in California it's very difficult to get parental rights revoked. It basically needs to be that damage has already occurred and it needs to be blatantly obvious. The state could care less whether your child is in clear and present danger emotionally.
My suggestion is to petition to change who supervises the visits, your XAH will likely have to foot the bill. But with a recent rehab (potentially) under his belt, you should have grounds to state that her grandparents clearly don't have a handle on things as well as they would have it seem.
Yes, this is EXTREMELY FRUSTRATING. I don't think I'm at a point to petition for changes yet - the consensus among the experts I've talked to is that this is plainly a non-ideal situation, but that the institutional alternatives are worse.
I'm trying to have a long view of this. People are extremely adaptable, children are adaptable. I have gone to great lengths to be independent and have a stable and fun and loving home for my kids no matter what curve balls they are thrown, so I am hoping that the 95% of time at my house is enough to give DD8 enough stability to know what's up when presented with the mind f*cks anywhere else in the world. My goal right now is to gas her up, make sure she feels strong and knows I'm in her corner, and not push her to feel too hard, too much, too soon. It is tempting to get really dramatic and feel big feelings about all this, so I am modeling steady, pleasant interactions around the house despite the big feelings, but with the verbalization of my feelings, per the child therapist. I haven't had to flex my Al-Anon muscles in awhile.