Hi Shirazza - you are not crazy, It is a highly emotional and overwhelming time for you, and we all try whatever we think is best to try and get through it.
The previous poster is obviously coming at things from the child’s perspective and, whilst I wouldn’t agree with some of the advice, I would agree that any formal action taken by yourselves is not likely to help matters at this stage. I totally understand the heartbreak at not seeing your granddaughter (we had the same), but without mending things with your daughter, anything you achieve with your granddaughter through formal channels is likely to be counterproductive and cause more harm in the long term. Bypassing your daughter to get contact with your granddaughter will never, in my experience, create long term harmony. Forcing someone to do something, taking away their control of a situation, is at the heart of many relationship problems.
I know you feel desperate, and I can only say what I would do, but personally I would ditch the formal approach and instead ficus solely on my relationship with your daughter. Go back to that ‘painful family fallout’, and work out what was behind it. Put yourself in her shoes entirely and try to envision how she saw the situation and why she took the action she did. Only when you can acknowledge that there may be another point of view, whether you agree with it or not, can you start to work from the two polar points of view (yours and hers), and bring them closer together.
Like I say, that’s just what I would do, heartbreaking as I know it is not to see your grandchild whilst working on that.