i am so sorry you are going through this, it really is between a rock and a hard place. I had something similar happen where my sister's husband would flirt with me , I did not even recognize it as flirting i thought he was just trying to be nice to his sister in law, well one day my sister and i got into an arguement and she ended it with "stay away from my husband" that is when i put the pieces of the puzzle together, i love my sister and unfortuately it was easier to place blame on me than to admit her husband was the one looking , but out of respect for her and her marriage i then avoided him at all costs , unfortuately that didn't appease my sister so in the end i lost my realtionship with her , but i know i did the right think and i still respect her for doing what she thinks is right even though i disagree with the blinders she put on, because if it is not me i am sure her husband will continue to look ,
i hope you can lay things out for your sister so she can't deny to you what is going on, so that you two can come to some kind of resloution, and mutual respect. if she is unwilling to admit to her actions or unwilling to change them then i see no other alternative to limit her contact with you and your husband, should should not have to go and hide or sleep to make your family happy, i hopw also that you can stand up for yourself and be strong and healthy
sorry for rambling but i hope somthing in all this helps
Linda
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