I'm writing this here because I really don't know what to do.
About four or five years ago I was at a point in my life where my only focus was having fun. I'd suffered from tremendous bullying in school that left me with crippling social anxiety and I found that I could overcome that with lots of "partying". I made a lot of friends most of whom turned out to be pretty untrustworthy and not very good people, but there were a few people who, like me, were just going through a phase and I remained close with them.
One of these people (I'll call her P) turned out to not be at all what I imagined. She had a very sad and horrendous childhood story that she told me when we met and I immediately felt awful for her and wanted to provide her with a stable relationship. I gave a lot in our relationship, and over time I realized that nothing was ever really returned. I've watched her self-sabotage over and over since then, and it only recently became clear to me that things weren't the way she portrayed them and she wasn't the permanent victim, but a perpetrator herself.
We grew distant for a while and when I thought she had changed for the better, I decided to give her another chance. When I started spending time with her again I discovered that she had become me. When we were around other friends of hers they would mention stories or anecdotes that she had told them which were actually things that had happened to me. She developed superficial interests in my hobbies, and flaunted them in front of people who didn't know me, I guess to make herself seem more interesting. But we couldn't enjoy these hobbies together, because if I tried to discuss them with her it would quickly become apparent that she wasn't actually interested.
On top of all this, she was doing copious amounts of illicit and prescribed drugs, constantly. It really wouldn't have bothered me so much if it weren't for her daughter (C), who I absolutely love. C is the main reason that I kept associating with P. She is just a toddler, and I felt she needed a person in her life who was stable and that she could trust. P would get her daughter one week a month (the rest of the time C was with C's father or his parents) and about half of those days I would end up babysitting C for free. When I would come pick her up the evidence was apparent that P had been sleeping while C roamed the house. The house was absolutely disgusting, dirt and food and garbage on the floors, and not a safe pace for a toddler. Once, C had gobs of greasy conditioner in her hair (because P was sleeping) and I took her to my home and rinsed it out. Another time, her eye was crusted up, and when I dropped her back off P told me it was because she had gotten nail polish in her eye while P was asleep.
Anyway, recently P had an episode wherein she repeatedly "attempted suicide", wrecked her car, was institutionalized (maybe twice?), broke up with the guy (V) who was giving her a place to stay and paying for her therapy and psychiatric treatment, and started treating him like complete garbage and telling people really awful things about him. This is when it really became apparent to me what a liar she is, and I've started to question everything she's ever told me. I have no idea what if any of it was true. I stopped speaking to her, and made every effort to remove her from my life. Sometimes I couldn't sleep at night because I was so upset by her behavior and it's effect on C.
At this point I have no contact with her, but the loss of my relationship with C is really tearing me apart. So much that I actually contacted C's father, who I've never been close to (mostly due to the awful things P told me about him while they were together, which I now realize probably aren't true) and asked to see her.
Sometimes I almost think it's worth initiating a relationship with P just so I can be closer to C.
Another problem is that most of my friends are friends with P, and so I'm constantly being exposed to her and the ridiculous things she's doing with herself. She's now living with my best friend, so I feel like I can't even see him anymore at all because I don't want to hear about her or think about her. I don't want to lose all of my friends because of this one toxic person, but I don't know how to handle it. Right now I'm avoiding my best friend and I feel very lonely and isolated.