I agree with LosingMyMindInGA, it is time to give her an ultamatum, either quit partying or i will let your husband know
I have to agree wtih HEatherm4. It could be depression from being away from her husband, it could be a new found sense of self-esteem after losing weight. Some people don't know how to handle it. She DOES need a reality check becuase she IS neglecting her children and putting her marriage in jeopardy. I think you and your mother should begin to refuse to watch the kids for her to go party. It would be different it if were for a job interview or something. By allowing her to continue to drop her kids off at will it is enabling her. CUT HER OFF!!! When she asks why, don't chew her out. Just simply tell her that you will not take part in her ruining her marriage and neglecting her kids. If she gets angry, walk away, hang up or close the door. She DOES NEED a reality check before she gets herself in a world of crap.
Honestly, if it were someone else, I would stay out of it but it's your sister and if she's going to be manipulative then I'd tell her off. She's neglecting her children, they already don't have one parent at home so they need their mother more than ever. I can see going out every once in a while and coming back at a decent time but not staying out all night and coming on to other guys.
I'd tell my brother in law if it were me. It's not fair that he works so hard for HER and their children and is disrespected in such a way.
She needs a reality check!