The level of terror your daughter is expressing is not something to be taken lightly. Whether it's anxiety (general or based on some event neither of you can remember) or sensory, you can get her help to resolve the underlying issue before trying to get her back in the water.
Biofeedback would teach her breathing and relaxation skills to use when she starts to feel panicky (after teaching her how to recognize and label that panicky feeling). The therapist can talk to her about swimming and how scared she gets while attached to the sensors (ears, finger and forehead...little stickers) so she can learn to stop the adrenaline flow even while thinking about swimming. The biofeedback computer lets her play a game like running a spider through a maze or making the sun come up and flowers bloom. The slower her breathing and heart rate, the farther and faster the little spider goes or the more things happen in the picture of the house. It's easy and fun to see how relaxed she can make her body. www.onlinebiofeedback.com
My daughter did biofeedback starting at age 5 1/2 and had great results.
Cranio-sacral massage therapy can be fantastic for anyone with sensory/anxiety issues. It's very gentle, the kids can wiggle and play with toys while the therapist works on them, and you stay right there during the session. I used to read to my daughter during her massages until she got old enough to read her own book. This therapy will either have dramatic results within 24 hours of your first session, or it will not do much of anything. Either way, you'll know quickly if it's working for her. That makes it a very cost-effective therapy to try. www.kenpiercy.com You're looking for a therapist who works with a lot of kids and has a CST-D certification. That's a masters level therapy training in this very subtle art/science. Skill and experience matter a great deal with a therapy technique like this.
My kids all did individual swim lessons. The style is infant survival swimming (flip, float, scream...so someone can come get you, or swim to the side or steps to get yourself out). It's one on one lessons, 4 days a week for 4 weeks, but only 10 minutes each day. Even with my daughter's anxiety and sensory issues, she could handle 10 minutes with the constant reassurance of the teacher's total attention. If you want the instructor's name, email me. She teaches in her own backyard pool, so it's quiet and private. My 2 big kids swim like fish. My 3 year old did his lessons this year with goggles because the water in his face was scaring him too much. He won't be a fish for a long time (maybe not ever), but he can float like a champ and knows what to do if he slips off the steps.
Yes, you have a problem bigger than a kid who won't swim. But there are plenty of things out there that can help her feel less overwhelmed by the world. Kids respond quickly to these therapies because they have had less time to ingrain those anxiety/sensory responses in their bodies and brains. It takes longer for an adult to un-learn those responses, so the sooner you start dealing with this, the sooner she can move past this.
Good luck,
S.
SAHM of 3