Hi sadgranma,
Do you know that your DD is doing everything she can to be friendly to your DIL? (This doesn't apply if your DD is a small child, of course).
I ask because when I was younger, DH's sisters were lovely to me in front of MIL but behind her back they would make snide and pointed comments and once mocked me outright after I'd had a tragedy in my life. DH was furious and refused to speak to them afterwards, MIL blamed me for the family rift. When my DCs were born, I would not let his sisters anywhere near them. Things are not always clear cut.
I'm afraid your DIL is going to go to her parents for support and childcare and they are going to probably see more of your GC. That must feel very sad for you, but it's not wrong as such, it's just that it's natural she will go to her mum. I did this when my DC were young. I would only let MIL hold them for 5 minutes, then I would get so stressed and anxious I would take them back. It's not fair but I think if you're getting 20-30 mins you're not doing badly.
My advice would be to keep it bright and breezy and try to make a friend of your DIL as much as possible. Make her feel you want to see her and not just your son and grandson. She is the key to things improving and this is going to be the only way. As your grandson gets older, she will naturally be less protective and as long as you keep a friendly and relaxed attitude, things should improve.
My relationship with my MIL was poor when mine were babies, and looking back, we've been able to acknowledge that we both made mistakes. Both of us have learnt from them over the years. We get on really well now. I genuinely love her and now my children are grown they have their own relationship with her, which is unique and just as strong as with my mother. They arrange to see her all on their own.
Keep kind, keep friendly and play the long game. Don't get yourself cut out at this early stage.