I agree with Betsyj. I love cats, but can't be around them much because I have very severe (not life-threatening) allergies. I think they are really wonderful animals. But they are already living in hell and even if they are put down, it's the humane thing to do compared to making them suffer like they are.
The environment is extremely unhealthy (both physically and mentally) for your in-laws, too, obviously. If your dh would divorce you because you cared enough to take steps to getting them help by calling the health department, then yeah, you might consider marriage counseling. He's in denial along with his parents. There is only so much you can compromise on to have your dh's parents in your lives without sacrificing your own health. It's your body and your child... you get to choose what is healthy and unhealthy. This isn't even a gray area... this is black and white. I would give an ultimatum in this case and I'm usually 100% against ultimatums. Either clean it up and get rid of the cats, or they don't get to see their granddaughter. Ask your dh if he would be O.K. to leave your dd there for a week while you went on vacation. If she's not safe there for a week, she's not safe there for an hour.