Go back home and don't look back. You will be so relieved and happy that you did. Don't look at it as a failure, look at it as another life experience that you learned from. I think situations like these is life screaming at us, telling us what direction to take in our life; the failure would be if you did not listen. Good Luck
Rats, I always find the really good threads long after the problem is solved - but here's my two cents anyway.
It's pretty obvious that you already know the answer and maybe coming on here is just a good way to get the reassurance you needed to see through your decision. You know in your heart that you haven't failed in anything by leaving this place. The only thing I don't see is any advantage in staying. Business-wise, sounds like you haven't increased your customer base or increased profits and there isn't much potential to do so; so unless you are legally bound by your lease agreement, doesn't it make financial, emotional and common sense to leave this negative situation?
Let's face it - you also know the truth about the whole "too attached to my kids" issue. At 4 and 1? C'mon - I worked as a nanny for a while and yes, there are women who couldn't wait 6 weeks after delivery to put their child in the care of others to go back to work - not out of necessity but they liked work more - then they get surprised when their child runs to someone else for comfort..... ok, getting off thread...
Melvira,
It is funny but, I am 61 and I think that being a grandmother is the greatest time of my life. Why? Because when I was raising my children I had to work and I missed seeing my daughter's first steps, my son's first day at school and many other first's. Now as a grandparent I am at a different stage in my life where I can sit back and enjoy those things with my grandchild and no they do not take the place of my child but they help some. They allow me to think back to some of the things I did get to take part in, like the kindergarden show and school breakfast. If you have a lease, contact an attorney and let him know what she does and see if she has in essence driven you to constructively break your lease and RUN LIKE HECK BACK TO THOSE BOYS!!!!!
evelyn
In the words of a famous American- "THERE'S NO PLACE LIKE HOME!" If you start everyday wondering how your landlord is going to impact your life-WHY?
Go home, be busy when you want to be and around when your children need you...! Don't worry about being too attached to your children-there is no such thing, until they are in college...
Back the truck up to the front door and start loading.
I just took my first born to college this last weekend, and the weeks leading up to it were so emotional for me. I just kept "seeing in my mind" him as a toddler and wondering how the time went by so quickly. People would tell me that and when you're in the throes of those 2's and 3's (and even 4's), you think it'll never end, but then you blink and they're all grown up! (It's interesting to me that I kept recalling those younger years and not the adolescent years when I was looking back).
Yeah, can't think why that is - who'd want to forget the teenage years??... 
(said in the snarky sarcastic way that only the mother of a 13.5 yo girl can muster!!)
You're right, though, use to drive me crazy when we were in the midst of sleepless nights, potty training, work, daycare etc etc, and my MIL would say "It doesn't last long". At the time I wanted to punch her, but now, of course, I see she was right...
If you had taken a job in an office or dept store, and it wasn't working for you, even after trying every avenue you could to make it work, would you stay or quit? Quit.
If the landlady keeps going on like she has been, even after you've spoken with her, then you have grounds to exit. Short of issuing a "Cease and Desist" order on her (to get her to shut the h*ll up and back off!), you're only option is to get out. If she's spouting that the business is 'hers', and you've got the legal rights to the name, then she's committing a fraudulent act - misrepresentation. If she's spouting off to your neighbours all the 'bad' things you've done, and you haven't - that's libel and slander. Either way, you could haul her butt into court if you really wanted to (but I know you don't, no one does).
You're sanity, and health, are more important. And don't for one minute think this isn't affecting your health. Headaches? Sore muscles? Sore jaw (clenching)? It is.
Like the voices in The Amityville Horror said .... GET....OUT!!! 
Good luck. 
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