I'm back, briefly. Ds back asleep, for now.
Natty, it really does sound like an awful position for you to be in. It sounds to me like it needs to be your Dh who takes action, if at all possible, as it's his family. As a first step, could you talk to him about it again - if he had an awful childhood, I'm sure he doesn't want his brother to have the same. Maybe you could have him, regularly, for a few days at a time to 'help out' your MIL - or at least that's how you could sell it to her.
Sorry I can't be much help - but we're always here to listen.