@blodyn91 Jesus fucking Christ she needs therapy. I sympathise I really really do. My MIL is similar - absolutely everything is negative. She can't be positive about anything. And I swear to god she has the easiest life going. Works a little job PT, no mortgage, 3 holidays a year, little hobby. Only herself to worry about.
Like you - I tried really really hard with her, more for my own sanity as it's tiring carrying around that constant resentment. Just when I think we are getting somewhere she does something absolutely ridiculous again.
For years I battled against my DH - essentially trying to show him she was entirely neurotic without actually saying the words.
He wouldn't hear it, would not hear a bad word about her. I had to change tactics as if I was "concerned" about her. But in all reality he already knew. He had grown up around it. And I can see by how he manages her at arms length sometimes.
I've distanced myself massively. He facilitates the kids relationship with her. I worry every single minute she has the kids alone as her judgement is cloudy at best but until something goes wrong I can't say no.
Although now I'm pregnant again she is trying to be my best friend and I find it draining but I'm better at putting boundaries in. And this will be my LAST baby I'm not being pushed into anything I don't want this time (ie turning up at the hospital).
My advice - remind your DH that YOU and your kids are his primary family now. Doesn't matter whatever happens from this point, you are next of kin, mother of his child and wife. That trumps any other family member.
And do not, seriously do not, let her get into your head. Do not let her question your rationality.
This is YOUR baby and your family and make clear boundaries ASAP.
Unsolicited advice "thank you" make no commitment to use it.
Unfounded Comments about your DH possibly having cancer "DH is more than capable of managing his own health and I do not need the negativity at the moment, thank you".
Boundaries from NOW - or she will do what my MIL did and nearly break you.