Reading between the lines, it seems to me that part of your reasoning for thinking your dc would be safe with your parents, is rooted in your belief that you were a bad child (unlike your good sister) who deserved punishment.
You were not and are not bad.
The scapegoat/ golden child family model is very common in dysfunctional families. It might be helpful to explore that at some point.
I think you’re inspirational OP. You’re breaking the cycle. You’re not beating your children. Your protective instinct was functioning just as it should. Well done. Double well done, because it wouldn’t have been at all unusual for you to lapse into the helplessness of your own childhood, in those circumstances. It’s really to your credit that you were able to step up to save your son.
Ok, hitting an elderly woman wasn’t ideal. And you should definitely talk it through with your ds. But you stopped her, and for all the hand wringing on here, I’m not sure how else you could have stopped the assault on your son as quickly and decisively.
In normal family dynamics grandparents don’t chase and beat their grandchildren. They really don’t. If my dc need discipline (by which I mean a look, a word, a time out, removal of a privilege) I step in, usually while the dgps chide me for being too hard on “high spirited” children.
Your parents are not normal. I grew up at a time when a slap was acceptable child discipline, and I still say that your parents were not normal.
I know a stranger on the internet saying these things won’t help you grasp this. It’s a truth that takes therapy and courage and support to absorb.
There is nothing wrong with you. But there is something very wrong with your parents.
Without knowing more about your dh, I can only suggest being patient with him. I’m guessing that his world view might have been warped by his own childhood experiences? We are often drawn to people with a little bit of our own damage and that can be a dangerous combination. I think the two of you are doing well because you’re both challenging yourselves and moving forward.
But I do want to say clearly that for whatever reasons, his priorities are out of kilter. He should be concerned about his dc welfare, and your welfare ahead of his in-laws.