What a mess. I didn't realize this happened during school hours. I know someone asked where the teacher was, but what I still don't get is what were the parents thinking??? I would never let my kids take a day off from school to go to someone's house to work on a single subject project, unless I had a note from the school.
Anyway, back to your original question about whether you're "IT", and assuming you don't have a President. I'm not so sure that's a safe assumption. Your Prez has been banned from the school; her daughter hasn't been expelled. Your bylaws probably just make it a requirement that your officers be members of the PTO, and let's say that your members are the teachers and any parents/guardians of a child in the school. Under that scenario, she can still be (and is!!) your President, technically. If she can have students meet at her house during the day, why wouldn't she call PTO meetings at her house at night?
Of course, from a practical standpoint, you need your Prez to have a good working relationship with the Principal.
Take a look at your bylaws before your next meeting and discuss the appropriate next steps with your Principal. If you don't follow proper procedure for replacing her, and this woman wants to remain President, this could get very nasty....