7 Year Old Stepdaughter - Psychotic Episode?

[pixilated1]

I have been married to my husband since my 7-year-old stepdaughter was just 3. We have always had a good relationship, though I have felt like she is clingy and perhaps a tad manipulative. She is the only child of two only children, and the only grandchild of well-off grandparents who spoil her rotten.  She lives with her mother and grandmother in a city 3 hours away.  Her visits to us have always been monthly but extended -- taking advantage of whatever long weekends, school vacations, etc that we can get.
My husband and I have no other children. We lead a life that is very different from her "normal home life."  Her mother is a well-compensated professional, and her grandparents contribute financially to make sure she has everything she wants and needs.  She is involved in countless classes, activities, camps, etc.  When she gets hungry in between meals, her grandmother jumps up to prepare a full-blown meal just for the child.
By contrast, her father and I are currently going through a very rough time financially.  This is new for us, and she has all kinds of questions: Why do we drive an old car?  Why can't we afford to go to the movies (again)?  Why don't we have a swimming pool?  Why don't we eat breakfast at restaurants?  In addition, her father and I both believe that overscheduling a child is harmful and that it's important to have free time... Time to read a book, make a fort, play with the cats, sing along to music, etc.  We don't feel it is necessary or even ideal to spend every waking second entertaining a child.
So the problem really starts here: Last month, the child's mother gave her a cell phone.  My stepdaughter has been sneaking off to call her mom and grandmother, as many as 10 times per day, to complain.  She tells them she is bored, she is hungry, she is hot (our car has no a/c), etc.  
It's all really silly stuff.  Like she called her mom while I was making dinner and complained that we hadn't fed her.  She left out the part I cooked breakfast and her father served lunch, and there were apples, oranges, and plums readily available in the kitchen.  She told her mother that I "left her home alone" when in reality, her father was in the next room.
This behavior is extremely uncharacteristic for her.  I believe that she has transfered her attachment to her security blanket, which she carried until a few months ago, onto the cell phone.  Except it isn't just a cell phone... it has her mommy inside of it, if that makes any sense.  She misses her normal home life, her friends, the restaurants and stores and toys, and would obviously much rather be there than here.
I can deal with that.  If I had a choice between working at Google and having a chef prepare me lunch every day, or working at Wal-Mart, I'd go for the swankier environment.
Anyway, the calling was getting completely out of hand.  My husband talked to his ex-wife and they decided that he would take the cell phone away.  My stepdaughter would be allowed to call her mother once a day to chat for a while.  Even this seems excessive in light of the fact that during previous long visits over the last four years, she's never once asked to call her mother or indicated that she was particularly unhappy.  But they agreed that once a day was an acceptable compromise.
My stepdaughter had a complete and total meltdown when he took the phone away.  She begged, cajoled, screamed, and yelled.  She slammed doors, threw things, threatened to run away, demanded to be taken home to her mother immediately, threatened to slam doors and also have all of her friends come over and slam doors (???).  She cried hysterially for about 45 minutes, then it was like a switch flipped and she turned psychotic.  It was like every horror movie you've seen of a possessed child (except she's never been allowed to watch those movies).  She screamed, told her father she hated his guts, threatened to "torture" him, charged at him and actually swung at him.  He was shocked.  He spanked her, which just made her more angry (note: he has only spanked her one other time, and it was years ago).  Then, as suddenly as the mean persona started, it ended and she was crying again.  Hysterically.  She started hitting herself in the head with books and saying she was "the worst girl ever."  He picked her up and held her, and asked why she thought that.  He gave specific examples -- "Are you bad at running?" (No) "Are you bad a coloring?" (No) "Are you bad at schoolwork?" (No)  After a while of this she calmed down, and they watched a movie together.  She was extremely well-behaved and clingy for the rest of the evening, and wanted to sleep in the bed with us, which was very unusual for her.  The whole thing was unusual for her.  I've never seen her do anything like this before.
I know a few things.  I know that the cell phone is a physical symbol for anxiety, like the blanket.  I know that usually children don't just break -- they have to be broken.
I had a rough childhood that involved rape and physical abuse (not to mention emotional abuse), and I can remember having episodes that were not dissimilar.  But I came from an extremely dysfunctional family and had experienced such trauma that I was bound to be a little crazy.  We've mulled it over and can't imagine that she is having these problems at home.  She certainly doesn't have them here.
I am completely baffled.  This behavior is entirely out of the ordinary for her.  I raised my (much) younger siblings, and never saw anything like this.  Could it be just a one-time thing?  Should we consider this a "warning" sign?  I hate to put too much weight on it, because from experience I know that focusing too much on the "problems" makes a child feel as though they ARE the problem.  I just really don't know what to do.

[ticked]

It sounds as though she is catered to all the time when she is at her mothers house.  I have no problem with what you and your husband are doing because sorry kids shouldnt have things handed to them on a silver plater because they will never learn certain skills in life.  

Why would the mother give her a cell phone, that is ridiculous for her age.

I would talk to the mother and figure out what is happening on both sides and see if you can see why she is behaving the way she is.  

[nmo2]

This age is a tough time for some kids -- they're caught in between two worlds. They used to being little children with no cares in the world, being supervised at all times, and feeling like the center of attention, to now wanting more independence, people having bigger expectations of them, and having responsibilities like chores, schoolwork, social relationships, and manners. The world suddenly seems big and confusing and contradictory and that can be hard to deal with, it requires developing a whole new set of skills. That said, the extended tantrum does raise some concerns. I would make arrangements to discuss it thoroughly with the other parent (his ex) and see if any new information comes to light. Counseling is an option worth considering, even if you think that perhaps she's just having a difficult time with this phase of childhood where she's realizing she must live in two different worlds. It could be an isolated incident but many disorders can present themselves at this age, so following up on your concerns could be beneficial for her in the long run.

[bipolargrl]

Hi Pix. I am sorry to hear about your stepdaughter. This is not likely to be an isolated incident. The child is clearly disturbed and is in need of psychiatric counselling. If she has a mental illness she may need medication too. The cell phone indeed is her lifeline to her mother and it was traumatizing for her to take it from her - your husband should have given it back since her reaction was so extreme. All her own mother had to do was to refuse to answer whenever her daughter called so that the child would lose interest perhaps and find something else to do.
In the meantime she is exhibiting very disturbed behaviour and needs to be assessed and treated. Being spoiled rotten could be a part of her issues but hitting herself and saying she is bad are the behaviours that are truly disturbing here.