Re: SIL dilikes my child. Cousins can't play.
I am sprry that you and your family are going thru this tough situation. While I would have been deeply hurt by my SIL doing this I would try to keep in mind how difficult things are for her and her daughter.
You have the spouse, the sweet daughter and she seems to be struggling and all this comparing children might have her thinking that her child isn't up to par with yours.
Here are some things that I suggest:
-do limit your contact w/ SIL and A* but don't speak badly of either in front of your child. This will cause you trouble if SIL wants to make peace later on.
-offer your child the opportunity to get together with other children and if she asks about playing w/ A* say something about A* not being able to come over at this time.
The great thing about this is that you and DH are on the same page on this issue. I would try to see things form her point of view and just pray that things get better for her. I know things must be really tough for her.