Any advice for helping my situation

I agree with what the other posters have said. You and your husband need to be on the same page. She is rude to you, then she is checked firmly and calmly by you both, then ignored until you see behaviour that is good. At that age they are starting to push boundaries, and they need to be firmly pushed back when they test them out, so that they turn into respectful, kind and well rounded adults.
It does sound very upsetting, I hope Granjenny this is resolved soon. Do let us know how you get on. Sending you a cup of tea and a sunny day

By ignore, I mean really ignore.
Don’t ignore the behaviour but be nice to her.
Ignore the behaviour and ignore her.
She won’t like it and will quickly realise if she wants attention, the way to get it is by being nice, not by being rude.

If her granddad is her hero, why don't you rope him in and ask him to say things like "That's my wife you're talking to, it upsets me to hear her spoken to like that." Or "that is your Granny/Nanna you are being rude to. She loves you and cooks you your tea?".

Or whatever is appropriate in your case. Surely she won't want to upset Granddad.

Her parents don’t really tell her off when it happens in my presence as they say don’t rise to the bait and to just ignore her
I think her parents are right.
‘Praise the good, ignore the bad’ works a treat in my opinion.
It would help if your DH, instead of basking in this child’s adoration, supported you by also ignoring her when she’s rude like this.

Your granddaughter is constantly changing and maturing. My now 9 year old granddaughter has certainly changed for the better in a year. She is more caring and polite. If/when she is rude to you - call her out on what she has said. Ask her how SHE would feel if a friend said that to her. And that is is hurtful. I think she has to learn better behaviour. I would not ignore it and talk to your daughter about it.

It does make me wonder if the child feels a lack of power and is gaining some sense of power by bullying someone and making them smaller than her. Could she be getting bullied at school? She could just be attention seeking as well. I'm not saying that either are of these things are what is happening, just a couple of thoughts. Whatever the reason, it's still not okay or to be accepted.

I actually don’t think it is normal behaviour so interesting you are asking if it’s a genuine post. I promise you that’s what happens on occasions and it shocks me.

There could be many reasons she does this. A friend of mine told me they were always awful to one of their grandmothers when they were a teenager, but to this day they can't say why. If one of my children had been that way, I can see my mother would have asked why they were always rude to them. My guess is my mother in law would just have straight out told a child off for being rude. At 8, go gently, but she is old enough to learn that it isn't okay to treat people that way. Can you have a quiet word with the parents, depending on general relationship dynamics with them? Maybe they can give you some insight? I also wouldn't be having her over or babysitting until she could be polite. If that disappoints the child, she learns actions have consequences. She can apologise and be given another chance then. It also sets a boundary with the parents that you aren't going to roll over and be treated that way by their child.

i wouldn't have her to stay or visit.
but if she does it in front of her parents and they don't check her, then that's more tricky.
what does your husband say when she is rude to you.
he needs to pull her up on it if her parents are not present.
is this actually a genuine situation OP ? sounds odd.