After a long (very uncomfortable) talk with DH (he tends to ignore things he's unhappy about and not want to talk about it)... we decided what we are going to do with our living situation, which has been my #1 biggest stress factor.
We decided to move into my grandparent's house with my parents. The first floor has a very large "parlor" type room that we will put french doors on and use as our bedroom and nursery, it will even be large enough for a sitting area.
It's not ideal, but it will save us a lot of money. We will be paying less than half what we pay now for rent, and all we have to do is buy new appliances that we will be able to take with us when we finally find a place we really like.
It might also be nice to not feel so alone all the time while DH is at work (he works 2nd).
I'm relieved we have a plan, but apprehensive of having to give up some of our independence.
Re: Not too happy, but made a decision on living arrangements.
We'll miss you sweet Debbie Girl (4.21.12) and sweet Cindy Girl (8.9.12)

Wow... I'm sure that was a hard decision to make. I don't know about your situation but I'm sure this was the route chosen for a reason. You are a stronger woman that I am. There's no way I could live with parents and grandparents!
There are a lot of positives that you listed. If often pays off to sacrifice rather than stretching yourself financially.
Now that the decision has been made, you can move on and start nesting!
We've been looking for a house with no luck. Our lease is up in less than 2 months, there is nothing for rent in our price range that is in a decent area (all the rents have gone up around here).
My grandfather is the only living grandparent and he moved out of the house since it's too large for just him (it's a 4 bedroom 9 room house). My mom is in the process of losing her job (they are outsourcing her department), so they are selling their house.
I'm trying to keep positive about it. DH is not too happy about it, but it's better than having no plan and being unprepared. I figure it will give us more time to look for a home and not have to settle on the first one we find.
Its nice to have a place to finally start nesting in. I've started thinking of how we are going to set up the room. We will probably go there tomorrow and start cleaning out the room, pick out paint, and price french doors. Next weekend I hope to paint and pick out a crib and dresser.
Not sure where in New England you are but regardless of where the housing prices are HUGE.
renting or buying you are going to pay pay pay.
We are buying my mothers house for the "family discount" and its still a fortune.
It's so good you guys have a plan and a place to start preparing for baby. DH and I have no idea where we are going to be living or where I am going to be working when LO is here (we are currently in two different states). I feel your pain of not being able to prepare and the stress! It sounds like you guys will have a big enough space to escape to when you need time by yourself. Good luck!