I think your scenario is the most probable.
I had been thinking she drugged and stuck the child in the trunk to go party, and perhaps duct taped her AFTER she died to keep fluids from seeping out, that were already starting to smell up her car.
But I don’t know. I didn’t really follow specifics. But I see Diane Downs when I look at her. I just hope she doesn’t have any more children, because I think she is perfectly capable of abusing another one.