baby born in the us

[weeyin33712]

My Daughter and her Husband came to the US (Florida) on a B1 visa, which was then changed to an E2, during this time they had a baby boy. They were granted E2 status by the INS here but when they went back to the UK and applied to have their visa E2 stamped in their passport, request was denied, they have approval from the US INS but are in the us on a tourist visa which expires next week.
Can anyone offer any advice - Baby is a US citizen, Grandparents (of baby) have green card.