Thanks for all these ideas ladies. Thing is OSD is not "officially" banned as such, more that I have told DH she only comes to visit here if certain things have happened like that I see the last 6 months' emails and texts from her to him and these contain no slurs on me or our kids. Obviously either she continues to bitch or he does not want in principle to lay their relationship out on a sacrificial table to me, so either way she does not visit. No doubt DH and she have another version of the deal, and I don't want to get into analyzing all this with YSD. And as for SS, he is allowed to visit anytime and even overnight, and his not living here has become something he actively wants after I tore a few strips off him last time he did it and just before I got him the rentals in April. So it is less black and white than that.
I think the time has come to really discuss this in depth with DH. I've had a go at it just now but we're too distracted by kids going in and out, workmen etc (oh yes I forgot to say, home improvements are going on, each time the place gets to look a little more classy there is a bid by one of the skids to move in, what a coincidence).
I tried to get the discussion up to what were the issues in our marriage and parenthood for us to deal with rather than simply do what she wanted because she asked it. He kept cutting to, "So you're saying no then", ie trying to turn it back on me being the baddie. I managed to block that and his next step was, as I laid out that she has a different lifestyle, can't he see that that will begin to irritate me, etc, that he would have an answer as to how this would all be different eg that she was working now, her behavior would be different, the dynamic would be different etc. He did have the grace to immediately admit that during her short stay with us recently he had indeed neglected our own kids. That I find really a great basis for then going on to have a proper discussion. But I was unnerved by the following thing he said. I pointed out that there were only 2 times really that, over the skid issues, he had stepped up to his responsibility as a family man and husband to my satisfaction, one was about a year ago when he replied to an abusive email of BM that she should never verbally abuse me again in an email about their children or he would not even answer it; and the other was when last January or so he had my back when I confronted SS about his private browsing on our computer and banned him from any computer use in our house. He said, "So there you are. Have you had any trouble from BM or SS since those two occasions? I was effective, wasn't I?" My chin hit the floor. The fact that he is unaware of the sacrifice and trouble I went through finding his son a home in April, taking full care of our own children as a single parent for 3 weeks, holding it together for our elder BS at the most serious point in his academic career to date, a crucial period which SS had threatened to railroad... It just beggars belief how babyish this approach is. I guess he would say that I could have had it easier just letting SS move in.
Anyway we've agreed to go on to discuss this more fully when we both have some alone time together and I am very happy about that as I may make some headway.
Any ideas on how to present this to someone so childish as DH, who is still at the level of saying "my daughter would not consume $50 worth of food/utilities in a week" rather than looking at the bigger picture of how he manages his household. Yes, I have the power within our marriage to simply lay down the line and say no to YSD, this would not be a problem, but then I would face the issue of knowing that DH did not understand and would demonize me further in his heart. I have to find some way of getting through to him and communicating that there is a higher level of thought about parenthood and marriage here that he is just not tapping into. The guy has a high enough intellect, but oh such a simple and childish soul.

That is a brilliant analogy Jameritt.
When DH and I sit down to discuss this I will highlight the dependency issue which is at the bottom of it all. He will no doubt deny it is there and just say this is convenience for YSD and companionability for him. But I think the difficulty for him is his whole family culture would be to view themselves as generous in saying yes. They come from a culture where hospitality and family are all. Which I understand. But family and hospitality mean different when they put another part of the family effectively into a servant position.
He has got to find a way of standing tall in front of his children and his parents and also say no. I don't think he can with them and I don't care about their opinion which will ensue from this, ie that yet again I am the bad fairy. But I don't want my marriage to return to being full of resentment and nasty subtle sniping by DH because he is not getting his way. So I am hoping maybe at least, after a lot of talking around it, he can understand my rationale.
Joke is he would completely get it if anyone tried to move into the same house as his ailing old parents and walk over their space and lives constantly like that. But of course he sees me as a limb of himself, hale, hearty and able to pull back my skirts and and make space in our nest. I might make the comparison to would he do this to MIL in order to see the look on his face.
I will keep you posted. Thanks so much all for your wisdom.

These are food for thought, thank you. Well I had the conversation and it turned out that YSD is plannig to rent with friends in another city from January. Until then she wants to work in the Christmas markets in our city, which start in October apparently, to save the money for the deposit. So yup, it's all about saving $. To be fair on her I learn she was offering us some rent, not much obviously as the aim was to save. At the same time my DH told me a parallel version of events which was that she was aware her illustration career had effectively foundered and wanted to get down to several weeks' worth of pure art so as to get her portfolio and website sorted out so as to relaunch herself. Which of these excuses is true and why they are both being put forward at once, beats me. The main problem for me in this situation is that I don't talk to her direct, we don't have a text or FB relationship, whilst I'm fond of her and do things with her whilst she's here I don't see her separately from DH. So whilst I've been toying with emailing or ringing her about this, I'm not sure how much of the stuff I am being told is DH's agenda and not hers so I don't want to muddy the waters.
Anyway he did admit that he neglected the bios when she was here recently, so had some insight, but when it came to the crunch it appeared the real reason he wanted her here was to have her with him, he insisted it was not she who was driving this.
I have made some headway with explaining that I am not her mother and therefore she feels like a guest when here, therefore different reactions are to be expected, but I've had some real beauties from him such as,when I said I felt I had been burdened by providing care for his kids in recent years when they were older, replying that didn't he do x and y for our bios. It took quite a while to get the point over to him that we both work all the time for our bios therefore he is not taking on any extra burden on my behalf in caring for them. Another choice point of his was, "But wouldn't you let BS16 move back in temporarily to get on his feet at that age?" er no DH, never mind the independence issue, but you can't compare BS to her because any decision made by us would be as a couple living together and each the parent of him. Then get this one, where I told him he really was welcome to live with his kids if he felt it was good for them but just elsewhere than our home, and I was happy to remain here with our boys for the time being. He replied, "But then wouldn't you call me over to help if you had a migraine?"in a tone as if this would be an imposition in the circumstances. I replied, "Of course I would and that would be right too, wouldn't it?" He seemed to get these points in the end.
But it's all so hard for him to understand. I think what's going on at the bottom of it all is he has subconsciously confused me into the role of a real mother of his kids. To be fair, this is what he did for his part in his own marriage. As I've said elsewhere, when he married BM they both believed she was pregnant with another man's child potentially, but he still took her on out of love for her, and to his credit he took OSD on in the belief that she was not his and loves her just the same as his others. However ironically, she does very much to me appear to be his DNA. But this is the point, because he's capable of this sort of self sacrifice, or masochism, call it what you will, he assumes I am the same and when I patently am not, he resents me.
How we concluded it thus far is that I told him that he should not bring the subject up again with YSD himself, as the reality is that she does have other places to go during this period and we are not the only option. If she does bring it up, then I've told him my position is that she's welcome to visit and be a guest as before, even for a period of weeks if it's to do her art in peace (whilst paying a small amount for keep if it's longer than a few days), but that she is not to come here in order to do or seek paid work and lead a working life as it is incompatible with our household. Furthermore if she wants to come as a guest for longer than a couple nights, then she must give us the exact dates of her stay so that we are clear where we stand. And lastly she leaves before Christmas because BM always engineers some sort of scene with her kids then and I don't want to be exposed to it. I feel this has struck the right note for the time being as it will probably not be acceptable to her at all, but if it is, it puts her and my relationship on the same footing as I have with SS, which is that if he comes on a short visit then there are no bars to my disciplining him or asking him to leave etc, and DH does not stand in my way over those things.
But the snarky sniping from DH has begun, I am put in the horrible "engaged" position of having to wonder whether to bring the subject up again with DH so as to get closure on the whole thing. And to top it, we are all going to a gathering for MIL's 80th next weekend. Where the nasty OSD and feckless SS will be, along with YSD and a team of in laws who none of them will understand for a moment why I am being so selfish and greedy in their view. I would have ducked out but my BSs are going and would become the target of comments if I did not show up.
Isn't step life hell. It's so horrible being labeled the bad one when you are already comletely stressed out by the subtle hostilities. Thank goodness we have this place to vent.

Thanks for your support, CL and PS, it means a lot to me -- and confirmation that my position's not unreasonable. DH is yet still trying to cling to the idea that I am being silly and do not realize that there is no threat to my wellbeing any more from his extended family.
It's ironic that my DH, as he said last night, sees me ever reducing his window onto a relationship with his kids, whilst I see him as ever reducing my and my children's opportunity for a stress free life. Guess I have to prove to him that having people to live with you for ever is not the only way of expressing parental love, and most importantly the only person whom you do that with is either your equal spouse or a disabled dependant/carer.
My DH was quite taken aback when I suddenly blurted, "For god's sake why don't you marry them all then". But it seemed to make him think. He and I just have never had a picture of an exclusive marriage together since the outset for I guess, in his mind, a major purpose of the marriage was to make up for loss. Loss of his dream of marriage with the BM, loss of his kids. The sad irony is that as it happens, I was in fact the love of his life but we had parted for 5 years and were wholly platonic friends before he married the BM and 15 years before this mess all happened. But that idyll was trampled all over by a bunch of trolls. I am just not going to allow my children to live in the same home as people who do not view it as a home and do not care about our little community.
And here's a new tip from my mom I got to add to our homilies on ugly in-law gatherings: "Say nothing but frequently smile annoyingly". }:)

But in a way we contribute to it. For we're too kind to say it's just politeness and trying to be helpful, from the outset. Or perhaps too fearful our relationship will not get off the ground. So that later when things have gone a little sour and we admit the lack of bond with the skids, then that's seen as some sort of backtrack, breach of promise, or dishonesty.