C.S.
My children go to a private home for day care and there is no way I would not pay her on time or give her info about my children when there was a problem. I'm sure you aren't charging any where near what it will cost for a day care center and that may be part of the problem for her, she probably realizes how much more it's going to cost. But also no one wants to feel like their children are being rejected and that could be how she is feeling. I completely agree that you gave her plenty of time to find a new day care.
I can also understand how you want to try and clear the air especially since she is a friend and neighbor. I would call and leave a message for her, let her know that you would like to spend some time with her to go over any questions she has and to clear the air.
Sometimes it's hard to be friends and have a business situation at the same time, especially when it deals with children...maybe let her know you just want to go back to being friends because the other situation just wasn't working for everyone. Let her know you still care about her and her children but that keeping it on a friend level instead of a job level will allow everyone to be on the same playing field all the time.