I have called a few breed clubs and told them our situation, that we need a dog (I don't want a puppy, thanks) who will neither eat the cats nor my son (put better than that, I promise! lol). You'd think I'd asked it be gilded in gold. I do realize there is going to be work acclimating an adult dog to our family, I'm not asking for the moon here. However, the reaction to asking for a, well, a sane pet, has been a bit... shocking. Apparently shelties now make a habit of eating the family cat and taking off a child's nose? I think not. However, I have seen what happens when a dog turns on a child firsthand, so am rather more aware of the possibility than most, I guess.
I want a sheltie for my son, probably sometime next year. Well, I want one like yesterday, but he is two, after all.
I want him to have that relationship. Heck, *I* want that relationship again!
More than your attachment to the old dog what I would deal with first is your fear of dogs. Obviously you have had some issues with dogs who have been violent, thus your fear of dogs eating cats and chewing children's noses off. If you have these fears, no dog will ever overcome your fear that they can turn on you at any moment.
Any breed can be violent, especially dogs who have been abused or those who for what ever reason have issues. However, most dogs do not turn on their owners or eat the cat. In fact many dogs can be safely conditioned to be with cats. My dogs will chase cats from the yard, but also have no issue with cats at the playgroup they attend. The owner has never had to restrain them. In fact the cats they have known have trained them to respect them. The dogs are far more intimidated by the cats they meet. However, they will not tolerate one in their yard. The instinct to protect the yard is such that they will chase. The do the same with squirrels. They have never captured or killed anything.
As for kids, I have had kids of all age groups troup through our house as I come from a large family with lots of nieces and nephews. What I have learned is I have to be on guard for the dogs sakes at all times. Children have no understanding of how to treat animals until we teach them. Young children, can be especially dangerous to dogs. Yes, that is correct, they can hurt dogs not just the other way around. I had a mother at a park laughing when her child came out of nowhere and grabbed Bailey by the hair around his nose to kiss him. Thank God Bailey is so gentle but the kid scared him and he cowered back against my husband. The woman thought it was CUTE!!! She is lucky her kid does have his nose. A different dog might have bit him to escape his attack. My husband quickly responded and got the child off the dog and the woman was offended. She truly had no idea what a close escape her child had and we have kept Bailey even more close when around strange young children. If he had bit the child, it would be Bailey, not the child or the parent facing the consequences of not having self-control even though the child assaulted the dog.
This is why so many rescues are hesitant to adopt dogs into families with young children. At two it is going to be challenging to get your child to respect the rights of the dog, not just protecting the child from any of your fears of what a dog might do to it. Pulling hair, grabbing ears, Sheltie tails, and noses is all something I have had to protect our dogs against when around young kids. It is not the dogs job to understand these attacks. However, if the child is not just a visitor, but a part of your home it can be very challenging to provide a safe environment for dog and child. I know people who do a great job and raise dog and child together with respect for both needs. However, it requires a healthy respect for both child AND dog. If your are going to add a third element that you want to learn to balance the needs of a cat, dog, and two year old playing in harmony, the juggling act can be even harder.
My suggestion would be to wait until your child is a bit older. Expose him to some dogs and see how he does with them. Teach him before you get a dog, how to be around dogs. This will decrease the chances of him hurting a dog. When you have to worry less about the child attacking the dog, the issues with the dog attacking the child will also lessen. I have no idea how old your cat is but the issue of cat/dog may not be a problem then either.
I grew up with dogs, not Shelties, and I can't think of a better experience for children. Dogs are wonderful pets for kids. However, there is a responsiblity not just to protect the kids, but to provide safe environments for the dogs, too. I get heart broken when I read rescue stories of dogs surrendered because parents couldn't handle the kids and the dogs and of course the dogs loose. It is important to understand having a dog is almost like taking on another kid. It is not enough to bring one home and let them loose. There is much more to the relationship than people imagine.
and at first I thought I'd never be ready for another Sheltie. 
She'll come to you in time, when you (& her) are both ready. And, it might not be exactly what you expect, but at the same time by no means do you have to "lower your standard" 
