Immigration Site

Please pardon the long post but I feel I need to explain thoroughly my exact situation. Thanks very much in advance for any response that may help.
I hope someone can help answer some questions and let me know if Im about to get screwed out of about $20k.
I am a US Citizen born and raised.
My wife (Colombian national) entered the US on March 15 2005 on a 120-day K1-finace Visa sponsored by her former boyfriend>who disappeared shortly after. Her visa expired on July 19 2005. She did not return to Colombia and lived with family in Florida.
I met her in March 2006 through a mutual friend and we began dating. She was honest with me about her status and I did not care, as the immigration process makes no sense to me anyway. I always thought that once you married a US Citizen then problem solved......apparently I have been living under a rock.......
We got married on June 20 2007. Shortly after that she became pregnant. Our child was born on April 22 2008 and is now 9 months old.
I have spoken to 2 attorneys during all of this time, both of wich tell me it will cost upwards of $10k and she will have to return to Colombia with my child for an undetermined amount of time.
I have been saving money for attorneys and to rent an apartment from a friend of mine in Colombia during this period. I now have the money but
I am very reluctant to be away from them so much. Needless to say I dont want to have to travel to Colombia every weekend to see my wife/daughter. Call me greedy but I would also like to use the money for a down payment on a new house, instead of what seems to me "giving it away" for something I may be able to handle myself. But I want to get on the right track and get the process started ASAP.
My questions:
I dont have a clue where to start to try to handle it myself.
Is it true she will have to return to Colombia?
Do I really need to fork out the $10k for an attorney?
I consider myself fairly intelligent, but Ive tried to decipher all of the paperwork and requirements and the more I read the more Im confused.
Should I chance screwing it up worse than it already is by attempting it myself?
I have read about the 10 year ban, and other horror stories-should I be worried so much about this?
Thank you very much for any advise you can give me.

While I personally dont have much experience with this scenario, one thing I do know is that if a K1 beneficiary (in this case, your wife) does not marry the petitioner named on the K1 (in this case, her former fiance) then she is unable to adjust status to that of a permanent resident based on the marriage to someone else. USCIS are very strict on this one....it is the original fiance or no one. As her I-94 that she would have received upon entering the US expired many years ago, then she is subject to the 10 year bar- however, there is a waiver that can be filed though I am not sure of its success ratings.

Heres a thread in another forum that is detailing a similar situation.
http://www.visajourney.com/forums/in...owtopic=151129

Thank you, good info in the link. This is along the lines of what I have been told in consults with 2 different attorneys. I guess I am looking for someone with a similar experience for a sanity check.
They both told me the only possibility of her remaining in the US is the I-601 waiver and it will be very difficult and she will most likely face a ban.
If anyone else has any advice it is greatly appreciated.

success rate of that waiver is low.
Yes, she faces the ban for 10 years. By law, she does not have to take the child with her, since the child is a US citizen.