First I will tell you how sorry I am you received this gut punch. When my son's life went off a cliff, so did mine. It took many years and a lot of posting before I got myself back. So what I write here in no way is to diminish how hard this is. But here goes:
Who knows about your son's arrest and who doesn't doesn't change the situation. It is what it is. Your son was arrested and that is reality. I was arrested twice, as a very young woman. I got educated nonetheless at a fine university and I have been a doctor 35 years. The facts of a person's life are what matters.
What is happening is ugly gossip. And the people spreading it are being ugly.
The facts of your life are what matters. Your value is not in question.
What that young person did to invade your son's privacy and the family's privacy is shameful. I agree with every single word New Leaf writes. You have no shame here. Your conduct is not called into question. Nor your value.
Not one thing happened that needs to take away your daughter's light or your family's pride and joy. The only thing that can do that is if you cave. You don't have to cave. I urge you to stand tall.