Pretty sure they're both valid, grammatically. If you replace "isn't that the daughter you've been looking for?" with "isn't that her?" it works out. You see it a lot with other negative contractions too. i.e. "weren't they grey?" =/= "were not they grey?" but is "were they not grey?"lil mistranslation that took me out.
"Wait isn't that the daughter you've been looking for" should be "Wait, is [that not the daughter] you've been looking for" other than that the rest was legible and easy to understand.