I guess one of the hardest parts of this is that Ndad has somehow turned the whole family against us (myself and my husband). Now the attacks come not only from him, but actually usually through the proxy (mom, sister, brothers), so we feel that if we do break from Ndad to protect ourselves, we will have to break from the rest of the family since they are being used as his proxies and we can't take the verbal blackmail/abuse from them either.
I talked with my mom the other day (I think she is an inverted N), and she basically said that Ndad is "afraid" of my H (because my H won't let him run over him, so he doesn't get his way), and that Ndad was "only doinf what he thought was best growing up" (I guess, verbal and emotional abuse is okay as long as you think you're right)

When I tried to tell her the truth she still wouldn't listen and continued to propogate Ndad's view of reality.
It got so bad a few months ago that my H threatened to get a harrassment restraining order against my Ndad. Ndad backed off for awhile, but sent in the sibling/mom proxies saying that my H was sinning to "take a brother to court" and that he couldn't contact us because of the threat to "seek reconciliation" so we told him we were sorry for "hurting his feelings" then confronted him with some false rumors we had heard from the proxies. He denied that he had started the rumors, and has made no attempt to admit any wrong doing in the two months since supposedly wanting to seek reconciliation. He's so good at spinning his tales, that the rest of the family believes him and are unwilling to listen to us.
I have always dealt with his abuse in the past by remaining silent, because I believed that was the best thing to do. But now that I am married and we have a daughter, I believe they are my first priority and I/we cannot allow this kind of emotional abuse/blackmail to continue. My H comes from a wonderful loving Christian home where there is complete, unconditional love and acceptance. It is such a stark contrast for me, having never experienced that in a family relationship. (I have had friends like that, but it's different in the context of family.)
My sis is one of the worst proxies, and may in fact be an N herself, as she is unwilling to listen and has an answer before I even finish my statement. She is a very angry person. And I hate to say it, but I do not want my daughter around her thinking that it's okay to act that way.
You are right, in the end, each one of us has to answer to one person alone and that is Christ. He knows our hearts. He knows our hurts and He is the Great Physician. He alone can heal the open wounds of a broken heart. And in the end the wicked do not prosper. I find a lot of comfort in Psalm 37. I know that my H and I have sought only to resolve the conflict in Christ honoring ways and our attempts have been branded as "sin" and "evil" and a "sign of unrepentance", so be it! We are not responsible for the thoughts of others--we are only responsible for our own thoughts and actions and will give an account for what we have done.
The finality of leaving/vanishing/not talking to the family is hard (there are nieces and nephews that I will miss terribly), but the constant barrage of degrading comments and back stabbing is CAUSING us to sin (we are stuggling with anger and bitterness now, where as, when this all started, we were far from angry and bitter). My H and I both feel that we should leave if only for the sake of cutting ourselves off from something that is causing us to sin.

We have sought counsel in this and that counsel is divided. some say stay and work it out, but those who know about NPD say "get out", but that doesn't make it any easier for me. I guess deep down I am an optimist, and even though I know that nothing has ever changed in my relationship with my Ndad--he is always right--I keep hoping and praying that someday the Lord will get a hold of his heart and he will realize what he has done and that he will actually CARE about me, about my H and about his grandchildren (not as sources of N supply--but truly care/love). I believe that NOTHING is impossible with God and I know that He can change even the vilest of sinners! I just pray that we will live to see His hand at work in our family and that He will be glorified in all things. We don't hate these people, in fact we love them (and have forgiven them for all the emotional and verbal abuse and the lies) and long for a genuine open relationship with them, but right now that seems impossible.
Thanks for listening and for caring. It is comforting to know that there are others out there who do understand and who will listen.