Wow meatwad, I feel for ya man.
Similiar thing happened to me about 6 months ago. The specifics are not the same, but the "getting screwed by family" thing is pretty much the same.
My situation: I inherited a house through my mom from my grandfather. Or at least I thought. I lived their for about a year.
During this time I replaced all the kitchen appliances, redid the bathrooms upstairs and downstairs and turned a bedroom into a computer room. (complete "to the studs" teardowns, jacuzzi tub, top rate stuff wall to wall.) Redid a good chunk of the electrical system in the house, and so on and so forth.
Around this time, mom decided divorce my dad, and this is when the truth came out. The house had NOT been left to me dircetly but actually had been purchased by my mom a couple years before my grandfather passed away. Something I had no idea about.
The house and of course the value of it was now going to be a factor in the divorce settlement. It was a personal asset that was going to get split up. The whole "inheritance" thing was a guise to avoid the houses value being split in a divorce (apparently this was planned well in advance.)
So of course my dad's lawyer finds this out, making it fair game, and the house is then put up for sale by my mom at an insanely low price (and therefore value) to a friend of my mom's.
EVERYTHING in the house gets sold part and parcel. The money i put into the renovations, the appliances....everything.
All toled, around $8,0000 worth of materials, plus HUNDREDS of hours of work that I put in. All sold off to avoid being valued against my mom as an asset in a divorce settlement.
Of course I was mad as all hell over it. I didnt speak to my mother for a good 6 months. Even now the conversations are extrememly strained and consist of her asking how i am doing, with a curt response.
I thought about going the legal route too. I very seriously thought about it. But after lengthy consideration and talking to a few folks about it, I decided to not pursue any real legal action.
It was too much of a hassle, the results i wanted were far from guaranteed, and the whole sitaution was already a twisted mess of lawyers and red tape. The fact of the matter is that yes, this (and your case) is civil law, and it is subject to so many restrictions and loop-holes. Even if you had receipts (as I did,) that doesnt really help you.
I decided to let things work themselves out. People tend to "get theirs" meatwad. SO far that is exactly what is happening. Just remember, bad things happen to good people. But REALLY crappy things happen to bad people.
It is sad that sometimes family is more interested in protecting their own interests (and padding their own bank accounts) than doing what is right when innocent third parties are concerned. It sounds to me like the inlaws are trying to get money that they feel is owed to them by somone else, using your stuff. Terrible.
P.S. What still sucks is im still paying off a small portion of the bill from the renovation store. Dont live there, dont get to enjoy the jacuzzi tub..but I get to pay for it.
Good luck man.