I'd ask around your daughter's preschool to see if some of the other parents have arrangements. Maybe there's a spot open with one of their babysitters. I don't think I'd want a hostile, bat-shit crazy woman watching my kid. Then you can scale your relationship with them to your comfort level. She is still your wife's mother and she has done well by you watching your child. I can see not really wanting to see her every week, though.