I love my family!
My Ex-Husband, his wife, My daughter (older one) her fiancee, the baby's father, my younger daughter, and myself all sat down last night and came up with a plan. Everyone agreed and we all walked away happy!

AND I have an appointment with my Therapist on Tuesday morning, to see if maybe I can get a week off just to get some "rest".

NOTES:
Daughter #1 works from home, so she is able to do emergency back up care if we need itl AND, she will help me with chores at my house if I have some bad PN days.
Ex-husband's children attend same school and day care as granddaughter.
Ex-husband gets off work at 3pm.
I start work at 8:30am.

PLAN:
Daughter #2 (One that is making me crazy) is moving out next week.
Baby's father is working during the day and attending school at night. He will have baby every other weekend and pay child support to me.
Granddaughter will live with me.
I will take granddaughter to school every morning. I do this already, it's not a big change.
Grandfather (my ex-husband) will pick her up along with his children at 3:30pm every day. Take her home with his children and feed her dinner and she plays with them until I get off work. (Currently daughter #2 picks her up and feeds her McDonalds or whatever drive thru she can and drags her around with her all evening while she goes to her friends houses and does whatever she feels like. The baby usually gets home around 10:00 and doesn't get to bed until 10:30 or 11:00)
When I get off at 5:30, I go by and pick her up from them. If I have errands, etc. I can leave her there until they are done, as she has alread had dinner.
I take her home with me, give her a shower, read her books, do her bed time routine. Teach her what it's like to have a "normal" schedule.
I will not have to feed her dinner during the week, as she will have dinner with Grandpa and his family every day. It is a healthy place for her to be after school! She is 4, his children are 5 and 7.
Daddy gets her every other weekend, and mommy gets her every other weekend.
She is NOT allowed to spend the night with either of them if they have someone else spending the night! She is to come home. (To my house)
If I have a date or plans for a weekend night, Daughter #1 can babysit, as she has a step-daughter the same age as granddaughter and they get along very well.
We agreed that Daughter #1 will only babysit for me overnight once a month, and I will do the same for her once a month. (However, her step daughter goes to her mom's every other weekend, so that's not likely)

We thought it would be very hard to convince Daughter #2 to give up her daughter, but I've been dropping this idea to her a lot over the last six months and she has been thinking about it a lot, and finally, she has admitted it is the best thing for her daughter!

I'm so happy! The whole family is working together to give this child a better life. She has been with me since the moment she was born. I gave her the first bath in the nursery at the hospital, cut her cord, all the things that daddy's do. Her mommy was just a baby when she had her. Her parents were not old enough or mature enough to have her. They tried, and realized that they need to do more growing up themselves before they are responsible for another life.