What do I say to my 3 yr old who wants to see her daddy?

Looks to me like you've got two separate problems going on here.

I would say above all your oldest kid needs help. She is causing unnecessary trouble and needs to sort things out. Looks like a power play and this needs to be nipped. It will not only destroy the 3-year-old's image of her dad, but it will also cause mental anguish for the dad, especially if he has nothing to hide (and more likely than not, he doesn't). After all, I'm sure he wants to have a relationship with his daughter. How would you feel if you were no longer allowed to see her without supervision and you had done nothing wrong? You know the older child knows that and it's a source of leverage for her. If she does not belong to the dad of the 3-year-old that is probably the root of the problem. Get her help before she destroys 3 lives: yours, your ex-boyfriend's, and your youngest daughter's.

It sounds like they need therapy. Maybe you could set aside your differences and let them talk to him on the phone? My husband and I are apart (not by choice) and he calls once a week to talk to the kids. You can also teach her about her father in Heaven and draw her closer to Him as a replacement?

.....You have to respect that while this child is very young, she is a person and deserves the truth. Probably the easiest way to tell her is tell her that it makes you very unhappy when she goes away to see her daddy, and you want her to be with you so she can make you happy. Please don't degrade the father to the child, she will only grow up hating you for it.