Lynn you are an amazing mom and it sounds like your neighbors are embarrased beyond belief (he is a Dr. so there's a certain social status and an expectation of behavior that goes with that) so they are lashing out against you. They are trying to save face and I'm sure will be talking about this to others to get their 'true story' out. If they weren't lashing out at you they would be forced to 'deal' with the situation.

That is great that you contacted the school. This will show a record and if there are any other problems with other children and touching down the road it's documented. Of coure they didin't want you to contact the school because then they couldn't sweep it under the rug. Even if you dealt with them directly... based on their current behaviour it sounds like they probably wouldn't handle it well.

As for the friendship your daughter had with their daughter they did you a favor by severing the relationship. I was SA as a child and if anything like what happend to your daughter happend to my child I would sever all contact (sounds harsh perhaps?). I surely wouldn't want to let my child do any sleep overs nevermind being friends. Forwarned is being forarmed. Many hugs to you for sticking up for your daughter and doing so with dignity. I hope this too shall pass quickly for you and your family. Your daughter will have a memory of a mother with dignity and wanted to love and protect her. You rock Lynn!