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					Originally Posted by FirstYorkie  My guess is that she just can't hold it all night.
 It's also possible that she's learned that the towel is okay place to go.  I'd take away the towel and put something else down - maybe newspaper or a pee pad.  She may be less likely to pee on a different substrate.
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  I second both of these.  Loki is totally trained and over a year and a half old and he still has to go out at night sometimes.  I know sometimes I wake up at night to go to the bathroom! It's normal for a dog too.  When he was smaller I would just set an alarm for 2am and take him out to avoid the mess that I would otherwise have to clean up in the morning. 
When we were crate training Loki he would pee on the blanket and then shove the blanket under the divider so that he didn't have to sit in it.  So we took out the blanket.  Yes, several times we came home to wet dog.  I think our record was 4 baths in one week.  But then he figured it out.  As long as you don't leave them in there longer than they can hold it, they will figure it out 
 
 
As far as the diapers, IMO they are meant for incontinent dogs and bitches in heat, not for potty training.  Many on here disagree.  If you keep the urine close to the skin it can basically burn/irritate their skin.  You also aren't really teaching the dog anything except that it's OK to pee in the diaper.  I understand using them if you are visiting another person's home, but I don't get the purpose of every day use for a puppy.  Many people suggested I put belly bands on Loki when we were housetraining, but he never marked (which is what they are for) and personally I'd rather clean up a spot on the floor than give Loki a bath.  If he peed on the carpet it was my fault for not watching him.  When we got Loki I had brand new white carpet.  (It's still white...thanks to my spot cleaner, but I'd never recommend white carpet to anyone!)