I know exactly how you feel.There are a few issues in my family that I would rather not publicize but nevertheless word sometimes does get around, and totally distorted to boot!
If it gets back to me, I explain exactly what happened and what the situation is now, and its not as bad as they heard, and the next thing I figure when it comes to the right shiduch they wont even hear it or they wont make an issue of it, and if they do and they are so narrowminded well thats not for me!