what a terrible situation for this little girl! Imagine what it would be like to have your own father tell you that you can not come home--that he does not want you around.
Her behavior is not unusual for a child in a joint custody situation, particularly when sleep arrangements differ and there is a major change like a new stepmother in the home. She is dealing with a high level of life disruption as compared to many girls her age, no matter how much she likes the stepmother. At at time of increased stress, we all need more understanding and patience, but instead it sounds like she is getting less. It would be very surprising for her not to be having an increased need for reassurance.
Aside from the 2 households issue, many children go through phases around dealing with fears. These typical phases include expressing fears about the dark, being alone in part of the house or going to sleep. Administering harsh punishments like taking her bike and most privileges is not likely to help with her difficulties with settling down to go to sleep, if anything putting such pressure on her is likely to worsen her anxiety. I am not saying the behavior has to be tolerated, but getting children back to sleeping independently is a process of gradually fading out your level of direct support while you encourage them to practice self-soothing techniques on their own (such as deep breathing, thinking peaceful thoughts, singing a song/saying a prayer etc.).
Taking her to a child psychologist could be a very helpful thing to do, since most of us spend much our time helping children with anxiety and behavior issues. Based on your description, it sounds like parenting work would be a critical part of the therapy. I am glad that you are approaching the situation with compassion for this child, and I wish you best of luck in trying to help her.
Thank you so much for your wonderful advice for my granddaughter. I feel much better now. I am going to forward this information to my son so that he can see what needs to be done. Normally, he has very good ideas and when he doesn't he calls me. He is very concerned and has already spoken to the biological mother regarding her part in the sleeping arrangements. They will get it straightened out and hopefully get her some professional help. It probably won't take very long with good help. I am sending him the book you so often recommend. Thanks again and I really appreciate your fast response. Sincerely, Pugysue