The FMLA can protect you, but everything here really depends on whether or not the employer can state a legitimate, non-discriminatory basis for their actions. Just having used FMLA doesn't create insurmountable protection.
Let me give two extreme examples to make the legal point clear.
1. If an employer is planning a lay off, and they have already established the basis for that lay off, and then an employee takes FMLA, the fact that that employee took FMLA would not stop the employer from laying them off. The basis for the layoff already existed, and the timing of the FMLA isn't legally relevant to the decision to release the employee.
2. If an employee is taking FMLA and then returns, but they steal money from the employer when they get back (or before they left), the fact of FMLA use doesn't stop the employer from using a legitimate basis for termination to let that employee go.
Now, I'm not saying either of these circumstances exists here. I'm simply using them to illustrate the idea. FMLA protects you from being terminated when the sole basis for your termination is your FMLA use itself. It doesn't create any additional protections.
In looking at the facts you've mentioned here, there can certainly be made the argument that your treatment didn't begin until after you used FMLA (them sending you FMLA paperwork right away isn't really legally suggestive of anything). That being said, the issues followed closely in time to your FMLA use, and that creates temporal proximity. Add in your apparent work history and the move doesn't make a lot of sense.
You should file a complaint with the Department of Labor immediately, stating that you feel your demotion and reduction in pay are directly related to your FMLA use. This is really the strongest protection you can get right now, because any action by the employer following your complaint will look like retaliation...and that may cause them to pause and rethink.