Wow, Wizard, that is just an unbelievable situation... I do know how you feel however. It is so unfortunate that society as a whole views child nudity as unhealthy, when the opposite is true. Besides the whole threat from CPS, the hardest part is explaining to the children why they all of a sudden have to wear a bathing suit. As a father, I think that is the most diffficult thing to come up with an honest answer that they can understand depending on their ages.
I don't have an answer for you, however, as a compromise, once explained to your kids, maybe they can wear suits at the springs (as you've indicated, also so no one takes pictures of them) and you can continue soaking al naturale. However, I fully understand both you and your wifes's concerns about CPS. Unfortunately, now they've got your "number" so to speak and they will be keeping a close eye on you.
This whole thing just totally saddens me. I think however that if any agency tries to interfere with your right to bring up your children as you choose, then the American Civil Liberties Union is a good place to contact.
I hope you don't lose to much sleep over this..I think most of us regulars sympathize with your plight.. It could have happened to any of us. Please keep us informed..