(I'll reply to this thread, as it's already on first page)
I'm sort of "pleased" to know glitch like this is happening to other people as well, maybe someone will figure out a fix for it some day as it's not just my game. It's an annoying thing to happen, I'm sure many many others are doing some sort of breeding with their pets, so loosing the family tree & relations is really a bummer.
In my game, I tried to cure it by moving the family out of the house and back in (in Edit Town). That's when everything got really messed out.
All pet's moved to the same row with human sims and got that strange woman's face as their icon. Meanwhile, everyone (both pets and humans) had a horse's picture above the LTW (the LTW was gone from everyone, but the moodlets still worked). I could no longer control anyone in the household, but they walked around and did things as usual.
This file was glitched in so many ways but it still wasn't ".bad". The next game I started got glitched after I moved a dog in, and it wasn't ".bad" either. I have been checking the file names to make sure nothing gets corrupted, but I guess it doesn't work (anymore?).
I gave up on that file and having pets. That's a pity though...