LynnyLou, you are in a really crummy situation. I hear your anguish. I have a granddaughter whom I am raising and it would have broken my heart if my daughter used her as a pawn and wouldn't allow me to see her. My heart aches for you, I do understand how much that hurts you.
Having said that, MWM said exactly the truth here, for whatever the reasons your daughter is this way, you have very little power here. As the Mom your daughter has all the cards. Although, that is a terrible situation for both you and your little granddaughter, there doesn't appear to be anything you can do.
That level of helplessness, powerlessness and sadness is very difficult to deal with, in particular when there is a small, innocent child hanging in the balance. When we are faced with those kinds of scenarios, all we can do is learn how to let go and accept what is. I know that is a tall order, which is why I always strongly recommend therapy, support groups or some avenue where YOU can go and get the tools and understanding you need to be able to navigate through this without it literally ruining your life.
This has already put you in a state of depression and anxiety and that is not healthy, you must find a way to detach and accept. I understand how ludicrous that sounds under the circumstances, but really, give this a moments thought............exactly what can you do to change this? If there is indeed something you can do, then do it. If the answer to that question is there is nothing you can do, then ruminating, worrying, being filled with dread and fear is NOT going to be of any help to you.............you have to find ways to let go. In my experience, letting go requires a great deal of help. What kind of help and where you get it is up to you, but you WILL need help.
If I were in your shoes I would seek counseling for ME, so that I could learn how to cope with the devastating helplessness and sadness this brings. I would not know how to do it. I would need someone to guide me and teach me and coach me through, as well as offer empathy and understanding. If you can let go and accept, YOU will feel a lot better. You may not ever be able to change one little piece of this situation, but you can learn to accept it and let go. And then, in spite of it all, you will be okay.