Well, I'm sure this will be a rather unpopular post, and maybe you'll be able to come up with some cute names like bunny hugger for me, but I have to disagree with what most of you have said in reference to killing it. Mostly because it just seems rather unnecessary.
To be honest, it really doesn't seem like the lion is as much a threat to the child as you all make it out to be. First of all, mountain lions hunt primarily at night, when they child will most likely be inside negating any threat, and the same thing should go for the dogs. Just keep them inside the house at night as well, and there shouldn't be any problems.
And just in case you gusy think I'm just spouting off, I live in an area that has mountain lions fairly frequently in the winter. They've been on the deck on the back of my house, and hunt geese on the lake behind my neighbors yard when it freezes in the winter. We've also had bears in the area, with one in a tree about six feet from our front door when my mom and brother went outside one night. Just about every year we hear about somebody's dog getting eaten by a mountain lion, but more often than not it happens when they leave the dog in the back yard and then go out for the night. People that keep their dogs in the house at night generally never have any problems with the cats. And I can't think of any time in the past five or six years that we've lived here when a child has been attacked.