Is this second, useless dwelling really preventing you from doing anything? If so, have you considered razing it?
You would need $500,000 in equity at 100% use by the schools to have $25,000 or so added to your family contribution. It sounds like that is very possible.
What CAN you pay annually? $10,000? $15,000?
If your daughter got a full tuition merit award someplace, would you be able to pay the room and board costs?