What a crappy situation E.
That is so tough to know what to do. Our puppies are our babies, just our our DD and #2, so I would be devastated to have to rehome one, and would never put one down; and would probably be willing to pay whatever I could afford to "make it work". When you said that you had to muzzle her most of the time, I felt so sad for her. I understand completely, that you have to keep your kids and other dog safe, but I hope this can be resolved so that the "agressive" dog is also happy with a good quality of life. I use "agressive" in quotes because I am not sure that is the case with her. You know them all best
Our rescue, Georgia, has been called "aggresive" by some, but really she is just scared...of everyone other than me and DH. We worked with her a lot with different trainers, and I loved all of our trainers
The right "fit" makes all the difference. I still do not trust Georgia 100% with other dogs- other than ours, and she can be snappy when she is tired. I know she hates little dogs now, so we keep her away from them. But, she gives us all the ques as to when she needs some time to be left alone, and just sleep or rest or whatever she wants. It was us that wasn't paying attention to her subtlties initially. Not saying that is happening with you, but that is what we had to learn.