Never, ever take the child if you have a personal relationship with the parents. I'm sorry but this is the reason why. It's such a hard place to be in and you now realize that you cannot be as open with this client, or as strict, as you would be with anyone else.

If it were me - I'd sit down with the parents and be honest. Explain that you value your personal relationship with them and that has affected your willingness to accept this isn't working.