Hi hoosier...I was just catching up on your thread.
I will comment a about the situation your D faces, with some of my personal history.
My father, while not a narcissist, was mentally ill. None of us who loved him really understood the depths of his illness while he was alive. It wasn't until after his death and seeing all of his life laid out there that we could really comprehend the total truth, which was basically this: although he was sometimes cruel and downright batty, he never really intended to hurt any of us...it was his illness that caused him to behave this way. And yet - the final lesson of it all was that, innocent of direct intention or not, we all had to protect ourselves from him in our own ways. Because even though he had a true "excuse" for his strange behavior, it still could have and did harm us all if we stayed too close in his path. There was nothing we could have done to help him with his illness, and so we all ended up doing what was best for ourselves, which was to distance ourselves from him. He died of brain cancer at age 60.
So the part of my story that relates to your D, which will not really be good advice or anything very encouraging...but it will be a reality check for you and later, for her...
My parents were divorced when I was 6 (not due to affairs) and when I was 10 my father got remarried to a very horrible step-mother. I don't want to say she was a horrible woman, because in fact I don't know her well enough to say that. But definitely she was a horrible step-mother. She was also a horrible wife. She was 30 years old when she met my father and he was her FIFTH husband.
She was jealous of my relationship with my father and she was very spiteful and immature. She did many things to try to damage my brother and I, in little weird, cruel ways.
She and my father did a lot of binge drinking, and my brother and I saw and heard some very wild, disturbing things during those episodes.
My father had always tried to get custody of us from my mother, and finally when we were in our early teens, we agreed willingly to live with him...before that age my mother would never have allowed this...but finally by then, she knew we had to see for ourselves what our father really was inside...how he truly behaves...how strange he really is. The only way to do this was by living with him, and by now, he was remarried, so we lived with the step-mother, too.
Their relationship was so volatile and my step-mother was so mean to us, that soon enough, my brother fled the coup and ran back to my mother's house. I stayed on for a few more months at my fathers, returned home to my mom's for a while, but then returned to live with my father and step-mother again for the last time when I was 14. By then my brother had graduated high school and was living with friends. He begged me not to go live with them again as he knew I would regret it. But at the time, it suited my wishes to live in the town my father lived in so I ignored my brother.
Within only about 6 months of living with my father and step-mother, I was losing my mind. She was so horrible to me and he just allowed it. I could not really understand what I was witnessing, as my father had always made a lot of noise about my mother's new husband - my step-father - and how I should "never listen to that idiot as he is not even related to you". Seemed though that when he himself remarried, it didn't matter what we told him about how she treated us, he would always take her side.
Finally there was a huge blow up and fight between my father and I about her. In this fight I finally blurted out how I felt very betrayed by how he would always take her side and never stand up for me. What he said to me at that time will never leave my memory. He told me that he "had to take her side because she is his wife, and that I will eventually grow up and move away, but she would be his wife forever". Therefore, he needed to align himself with her so that his own future would be happier, and he didn't really care about my current happiness.
Now...in a perfect world, of course you would stand up to your child and tell them that you have to side with your spouse...but this was not a perfect world. The woman was abusive to us and he knew it, and he was making these statements knowing that there would never be any chance of his wife changing her abusive nature.
I could not believe my ears, because again, he had made so many dispariging remarks about my step-father over the years. It shook me to my core and I moved back to my mother's house shortly after that.
And then....within 1 year of my moving back to mom's, my father and step-mother were divorced. (She has later had two husbands after him, making it SEVEN husbands total). So I had to chuckle to myself, "yeah right dad, I'll grow up and move away and SHE will be your wife FOREVER???? Uh huh. And NOW who is still in your life forever, ME, and who is gone forever? HER. Chyuh."
But here's the point for you and your daughter...I really HAD to learn this lesson directly from his own mouth and his own actions. I had to see him for who he really was, not the Disneyland weekend Superdad I had believed him to be when I was younger and before he remarried. It hurt me immensely, but it also helped me in my future with him. It helped me to know for sure who he was and that he would throw me under the bus. I had to grow up and realize that a mentally ill person can really very much love you...and still be a very dangerous person to you if you don't keep your boundaries in place.
I hated him for a while...but later I understood him. I forgave him for everything, but remained distant enough so that he couldn't hurt me again. I loved him again finally, but never fully trusted him with my emotional feelings.
I was so glad to know who he truly was at a young age, so that I wouldn't have been disillusioned by the truth later as an adult. Yes it hurt. Another life lesson is that people who love us do hurt us, and I was glad for that lesson too as it helped me in numerous situations as an adult.
Finally now it doesn't hurt anymore, and I can really understand that his illness had nothing to do with me. No one can guarantee your daughter will come to that conclusion, but it is likely she will. Try very hard not to worry that she will grow up with too many issues, because she will likely grow up very smart and kind, but very wise to the ways people can be. She will know he loves her, but that he will throw her under the bus for OW. This hurts, of course, but since it is her reality, it is best for her to see it directly.
I do wish I had someone I could have vented to when I was her age about my father's behavior. Unfortunately, my entire family had also been hurt by him so they all could say nothing other than "well yep, that's your dad, he's done it to us, too". I wish I had someone outside my family who would have simply listened to me talk about it and hear the hurt in my voice, say "there there, poor dear" and then I could have at least felt justified in my feelings. I hope your D at least has something along those lines. I got by fine without counseling (which would come later), but simply a kind adult ear and shoulder would have really helped.
I hope my story helps you in some small way. Keep updating us. It takes a long long time, but eventually, everything smoothes out and you look backward and see your life behind you...and it doesn't look as bad as it did while you were climbing up the hill.