I don't think badly of you, I know how difficult it is. I really do. Thanks for getting back to me.
I do think that you are a great animal mommy and that maybe the timing has been difficult with your little one and such a little dog. Would you be open to going back to training with your Maltese? Actually, I don't know if you ever did take her to obedience, but I think every thing she's doing is really reversible if you really want to keep her. I'm sorry if I'm overstepping my boundaries, as I don't know you, and please take this for what it's worth-2 cents, as that's what my opinion boils down to. This is what I would do if I were in a similar position (and I was, sort of, with my dane).
1. Enroll in basic obedience classes with her ASAP. I am sure there are some classes around Buffalo, but I do recommend my trainers highly. They just started a new basic obedience session this week, but I'm sure they would let you start next week. I didn't want to come off strongly on the phone with you, so I didn't say this then, but it is not okay that she is growling at any one in your house, even if your son is "torturing" her. It shouldn't be looked at as "well, she's a dog so she's going to growl because he's harassing her." I let my dane growl at my four year old, mainly because I knew he was torturing him. I now know this was a huge mistake. If my Posh growls at Violet (four year old) even when Violet is being a little turd, I instantly get on Posh's case (by telling her no growl/in a growly voice and I grab her by the cheeks), and later reprimand Violet. Posh must know immediately that this is not okay with me, the pack leader, and that Violet is higher up on the pack order then Posh is. I do not allow any growling whatsoever with my dog, ever. Basic obedience will help you to learn how to help Daisy use her mind and learn some manners so that you can control her want to "show these kids she's the alpha." It would also be a very good time for bonding, so I don't know if your husband would go too, you could alternate weeks, but once he sees how smart and good she can be after learning some "tricks" he may start to bond with her. Maltese are extremely smart dogs, and although they don't need the physical exercise of the walk, they need the mental exercise of it (healing, sitting, minding on a leash, not pulling on a harness which actually gives them the sensation they should pull-notice that's what they use on sled dogs.) This training time would also get some good positive doggy socialization time, so she stops lunging at the other dogs. As you said, this is really not safe behavior for her.
2. Set some rules for your four year old, and help him by buying his own "Daisy." My daughter has a little dog that looks like Posh that I bought her at Target, here is a link that takes you to the Maltese version: http://www.target.com/gp/detail.html...t_adv_XPSD0500
Violet is allowed to brush (even with my nice brushes for Posh), hold, "walk" on a leash (usually using Posh's leads), dress up and care for this Posh. When she wants to do something to the living Posh e.g. hold her, I say "go get YOUR Posh, you can hold her." or brush her, walk her, etc...These kids really do want to model our behavior. I would also teach him to sit down, and call her into his lap vs. pick her up, and other small children too. You might want to start doing this as well, and not pick her up for a while and see if he will model this behavior, vs. picking her up. I would also tell stranger kids a fib "don't pick her up, she bites." or tell them you can see my dog, but my rule is you must sit down and get to her level and she will come into your lap and give you "lickies." I would make it a general rule that no one under ten picks her up EVER. They have to sit down and have her walk into their lap, or have her set in their laps by you. Also, can your son give her treats when she sits for him? This will be a nice time for them together. Also, my breeder recommended a time, usually at night, where you flip the dog on their backs like a baby and rub their tummies while quietly talking to them and to involve your children in this cuddle time so they didn't view your kids as something to be crazy around.
3. I would crate her if you can't supervise your preschooler and Daisy. If my kids touch the crate, which is a kid's free zone, they are put in a time out (well the four year old is the only one who tries to bend this rule, and now she's used to it and knows she will get a time out, so she doesn't). When the new baby arrives you will have your hands full during feeding time, especially if you are breast feeding and it's just too tempting for toddlers to pull the "mommy lotto" or "puppy lotto" to see what kind of reaction they can create. I also recommend a "nursey box" full of toys for you little boy to play with while you are feeding the baby. My kids are four years apart and this "saved my day!"
4. What kind of food are you feeding her? This can contribute to so much, including personality and potty issues.
6. If you are using a harness with her, I would stop using it, instead think about getting her a martingale collar for walks. It works like training collar but is much less harsh on her little neck. I have ordered one of these for Posh http://www.allhoundsapparel.com/custom/list.asp?c=20353
it is really nice and stops her from pulling/choking herself. Although, she walks really pretty nicely on a leash. The harness only gives them the sensation that they should pull, as I said above they use harness on sled dogs for this very reason.
Well, this has turned out to be a novel. And, again, I'm sorry if I have overstepped my boundaries with all my crazy dog lady advice. I totally understand where you are coming from and have only gained my knowledge by making my own mistakes. I had a dane who was sometimes scary, even to me, because I allowed him to be ahead of me in the pack order, which made him lack confidence. I wasn't consistent, he bugged every one, especially my husband, and he lived his days never really being all the dog he could be. Truly, I have been in your position and it is so hard, especially so when you are just trying to give everybody, husband, kids, dogs, cats your loving care. Which I know is exactly what you are trying to do.