Oh CK, I'm so sorry! It must feel as if a good relationship suddenly went spiraling downhill and you don't know how to stop it! How frustrating and painful!
I know it may be cold comfort to hear that others have gone through the same. But I hope it helps a little.
Perhaps it will also help to look at the difference in cards as a "message," rather than something intended to hurt you? Or just as a reflection of how DIL feels? Clearly, "Granddad" is doing something differently than you are and it's working. Have you any idea what the difference is?
"It seems I cant say or do anything right and she constantly contradicts/queries anything I say, on almost any subject."
Any subject, at all, or just those related to babycare, etc? A lot has changed since we had babies ( back-sleeping instead of tummy-sleeping, no heavy blankets, etc.), so she may really feel she knows better than you on this topic. And hey, hate to admit it, but a lot of what we grannies "know"/"knew" is out-of-date now, unfortunately. That may be why you're running into a problem though she could be kinder about it, I know.
Generally speaking, if much of what you say is in the realm of advice - don't - at least, not unless asked, and even then, not much. Young parents don't often seem to be fond of unsolicited advice - I know I wasn't - and today, they seem more vocal about letting us know that (believe me, I've faced that even as the MGM - maternal grandmother). I know you mean well, if that's what you've been doing, and were just trying to give DIL the benefit of your experience. But she may see it as criticism. I see you've already begun to bite your tongue - kudos! I know it's frustrating, but I strongly suggest you continue to do so. It may take a while, though, before she gets over those first "mistakes" of unwanted advice.
As for things you "do" - Are you talking about things like inishowen mentioned - taking the initiative and trying to help by doing laundry or whatever? Some young moms would love that! But from what I read online, others don't. Better, IMO, to always ask first. ("Would you like me to do some laundry for you, so you can focus on baby?"... "Would you like me to bring some meals over, so you and DS could get more of a break/spend more time with baby?"... etc.) And, of course, as hard as it may be, sometimes, always accept it if she declines. Again, if this has been a problem, it may take a while for her to trust the change.
If she just generally argues with/criticizes you, even if you just make a comment about the weather or walk from here to there and so forth, then maybe, you need some time away from each other. IOWs, maybe you need to cut back on how often you see them.
(((Hugs)))