It is totally unacceptable that the children are being manipulated in this way, as you well know. And I am sure you must be very concerned about the effect that this will have on them if it continues.
There are family mediation centres in most areas and, although it is clear that DIL would not play ball with this, it might be helpful for your son to talk with them about how to manage this situation for the sake of the children. I am sure they are used to just one partner turning up.
It is so good that you are there to be a rock for these children, but the current situation is not tenable in the long term if the children are to emerge relatively unscathed. I do not mean to sound alarmist or depressing, as I am sure you realise that anyway.
As you know from my previous post, I think that SSD needs to be involved. I know it would be a red rag to a bull, but something needs to happen that will make her take on board the seriousness of the damage she is doing to the children.
Keep up the good work - where would they be without you? 