I don't have any suggestions for you to pass along, but I think the idea of her doing that to a young child is horrendous! When my sister and I were younger (much older than preschool), our mother made us both sit with a bar of soap in our mouth for about an hour because she overheard us saying swear words...we had just heard them/learned them???
To this day I remember that incident and it really is a horrible memory. I remember every little detail about, from the gagging to being stuck with that disgusting taste in my mouth for what seemed like forever-I could NEVER imagine doing this to my own child. I hope for her sake and the sake of her dd, that she comes to her senses and realizes what a stupid decision that would be...I mean come on, there are times when we all feel "unqualified" to be a parent, but I still know the difference between a discipline of sorts and something that is just plain cruel and unescessary.
Btw, I think you are very kind for looking to help her, I hope someone has some good suggestions for you to pass along.