This is the part I can't get on board with. Just because you're friends with someone doesn't entitle them to a discount.
I do agree with a PP who said that some parents will walk all over childcare providers. Start a nanny thread on the DISboards and you'll hear some horror stories, I guarantee it.
I think the OP asked the parents for their okay -- they gave it and she made her plans. If they are backing out at the last minute that's too bad -- they need to stick with what they agreed with -- including paying the OP.
From everything the OP has posted though, it doesn't sound like the parents were EVER okay with having their 2 year old at VBS, which is why they made arrangements for the grandparent to watch her. And for those parents, that's a valid concern. They aren't paying the OP for their child to be watched by strangers in a nursery.
What if the OP were volunteering at a soup kitchen in the city for two hours a day and there was a nursery there to watch kids? Would any parents be okay with that scenario? The principal is the same. The parents are paying the OP for childcare, there will be part of the day the OP isn't actually watching the 2 year old, the church nursery is, and the parents don't want that or want to pay for it.
This whole thing could be flipped around from the parent's perspective:
"We're friends with our childcare provider. She's great and gives us a great rate on childcare. She wanted to volunteer for VBS this year. We're not really comfortable with her leaving her house with our kids but we're getting a good deal and our 12 year old might enjoy it and we said okay. Now we find out our 2 year old will be watched by strangers in a nursery and we're concerned about it and not okay with it. We approached the daycare provider about it and told her we made other arrangements to for daycare for the 2 year old and now she's telling we still have to pay for services we're not going to use while she's volunteering."
OP - no one is saying you are a horrible person or a horrible childcare provider. And I agree with many others that daycare outings are probably nice for the kids as opposed to being stuck in a house all day. But a 2 year old being watched by strangers is a different story. It doesn't matter if they're people from church, it doesn't matter if they've had background checks. To the parents, they're strangers who are watching their child for two hours a day. As a daycare provider and a parent, I'm sure that you can understand their concerns. It's unfair to ask them to pay for that.
And I'm sure that there are childcare providers out there who get taken advantage of every day by parents. No doubt it's a hard and thankless job. But it is still a job that you are being paid to do. The parents are still the customers (at whatever price YOU agreed to) and there is a level of service that is (or should be) agreed upon and upheld from the outset. If the level of service changes, then the price should be adjusted.
If they can't agree or compromise then they should part ways and the parents should find daycare services that they are comfortable with and can afford and the OP can fill the spots with people who want the service she provides.
You can't mix business and friendship and have BOTH parties graying those boundaries whenever it becomes convenient for either of them without expecting problems like this to come up.
The OP wants to follow the rule of business when it comes to payment but not when it comes to volunteering during business hours. The parents want the cheaper daycare rate but strict guidelines.
Neither of them can have it both ways.
OP if you are friends with these people you need to ask yourself whether arguing over less than a hundred bucks a week is an argument worth ending a friendship over. They made a mistake here and so did you.