My heart is breaking for you, Anna4! How awful to be CO (cut off) from both DDs and all DGC, all at once, for so many months, and w/o a word of explanation! Though I've heard other stories like this, I still can barely imagine the pain.
I don't think you should brush off what happened last Christmas though. After all, that was the last time you socialized with your DDs and DGC before the CO. It sounds as if DD2 was very stressed, and that may have, unfortunately, colored her reactions. Changing a diaper the "wrong way" is an easy error to make if you (general) haven't done that in a while, and hardly CO-worthy, IMO. When put together w/ DD's accusation that you were ignoring one child, however, it may have seemed to her as if you were distracted and indifferent to her kids. OR she may have just been upset about your seeming to favor two over one. I'm NOT saying that's the case, just that it might have looked that way to her.
I get your giving her a generic apology in your desperation to reconnect. I might have done the same thing in your shoes. But as a GM, myself, I agree w/ Hithere that she may have been more offended by this, sad to say. Instead of realizing that you didn't know what was wrong, she may have seen it as a refusal to admit what was wrong... sigh... And since you already have issues w/ DD1, it was probably very easy for her to jump on board w/ this.
I also agree w/ Smileless and those who say to back off for now. Chances are one or both of your DDs will come around, eventually, even if it takes a much longer time than now. They will miss you or the kids will ask about you or whatever.
One caveat though- You might want to try one more apology, acknowledging that you were a little indifferent to the DGC that day last Christmas and saying sorry for that. You might add that you were tired, or distracted for some reason, but I wouldn't defend myself too much or she might see that as "making excuses." More important to reassure her you love all the grands and you won't let that happen again.
OR if you suspect it was just about not seeming to pay attention to that one GC, just apologize for that and assure her you love the child and that mistake won't happen again, etc. It might not help - just a suggestion. And, of course, only do this if you feel you really made a mistake and your heart is in the apology.
If you try this and it doesn't get a response, then I agree with others that you should just go on w/ your own life, enjoy your career and activities, etc. and say no more to your DDs for now.
Sending you lots of hugs!