They probably never knew. I think it happened like this: Ellone gets abducted, so Laguna goes looking. Squall's born, Raine dies, Squall goes to the orphanage. Laguna finds Ellone, gets embroiled in Esthar politics, and sends Ellone back to Raine - not realising she's died. Winhill then sends Ellone to the orphanage too.
I could be wrong, someone's sure to correct me if that's the case.