What happened to the babies?

I'm looking for advice/info about a little kitty who moved in on us recently. Last Sunday night we had a kitty show up at our back door. Her milk glands were very swollen. We weren't sure if she had already given birth or was still preggers. Her cries were pretty pitiful, so we fed her and then thought we'd follow her to see if she'd take us to a nest of babies. I walked her all around our house, but all she did was stay right by my feet.

Next day I took her to the vet. I was concerned about fleas (what treatment would be okay under the circumstances) and possible ringworm (turned out to be a bruise). I asked the vet if she was still preggers or if we should be beating the bushes looking for babies. Vet tried listening for heartbeats but could only hear gas (yup, she was stinky pootin' for the vet). Vet tried an ultrasound, but couldn't see anything. All the same, the vet thought she was still preggers. And predicted she'd give birth within a week.

Well, today her milk glands are almost back to normal. My question is, could she have mis-carried without our noticing? We kept her in our house, but gave her opportunities to go find babies, she never showed the slightest interest. We're stymied.

First of all I commmend you for taking this stray to the vet to get answers. You probably spent some money you didn't really intend to spend on this poor cat. So kudos to you for being so caring!

Although it is possible she lost the kittens there would be signs, depending on where she was kept?

Thank you for taking this cat in need into your home, and to a vet to be cared for. Not many people would be as caring as yourself!
It's always possible she could have miscarried, or delivered a litter of stillborn kittens. Without even knowing where she came from, you can't tell.
I have seen this happen as well...mom delivers kittens in someones home and then the owners will let mom out of the house. Also, I have known people to dump the mom cat, and keep the kittens. So, it's possible that mom had the kittens in a home, and now she is on her own.
If she can get to the kittens, and they are okay she will usually make her way back to them one way or another. From what you describe, she's not "missing" her kittens.

To expand on what Sandie has said, let me tell you a short story. 2 years ago a cat appeared, carrying what I thought at first was a mouse in her mouth. Turned out to be a kitten. We had never seen this cat before, although we do private rescue. She walked quite a distance from our creek, into our shop, dropped the kitten on my surprised husband's lap and left! She did this four times and we finally carried the babies into the house and up to the cat room. She followed closely. She was fine with them until about 5:00 p.m. when she started yowling and crying and scratching at the door at the foot of the stairs. I took a chance and let her out, and she bolted outside and into the darkness. She came back about an hour later carrying her biggest and last kitten. Cats have great instinct if her kittens are living and outside she will tell you.