Oh my!!! She is so sweet. I'm very glad to hear that she is doing well.
I wonder if there is latex in the diapers and if she is reacting to that? The main reaction to latex in those who are allergic is a rash. Maybe there are some hypoallergenic diapers that she could use? Maybe someone could make her a few pairs out of cotton that could be hosed off and then tossed in the washing machine? But that might not be a popular idea for your inlaws.
Are they diapers made for cats or kids diapers? Maybe creating a few holes at the top and side of the diapers would create some airflow would help prevent the rash as well.