I'm sorry for what happened, it is as they say 'your party' and it's awful that she ruined it.

The exact same thing happened to my mum (who wanted all the same things as you, intimate with SO) with my grandmother. ~21 years ago I became detached from the placenta causing an emergency C-section. Drugs weren't as sophisticated so my mum was knocked out and induced in a coma for 2 days due to complications. As the IV was being attached my grandmother (who is notably interfering) was trying to barge in and just making the experience more traumatic. My dad didn't do anything to get rid of her. When she woke 2 days later, distraught (she didn't even know I was alive), my grandmother was shoving pictures in her face of her holding me and had told the whole neighborhood, teasing her saying she must feel like less of a mother for not holding me first.

I won't lie... my mother has harbored this grudge for 21 years now. She hates my grandmother, won't tolerate her outside of birthdays and Christmas. I have a good relationship with both of course, hasn't really affected me, but tbh I can recognise my grandmother is interfering in every day life and annoying and narcassistic, still she's a good grandmother, terrible MIL.

The only piece of advice I'd offer is don't vocally put her down in front of your children. I've had it all my life and now I'm old enough to realise - the trash talking is really wrong. I love my grandmother, she has been nothing but loving to me (and interfering but that's tolerable). You are within your rights to harbour a grudge but you will bear the consequences... it drove a wedge between my parents.

Tbh I wish my parents/dad had gone to my grandmother, sat her down and told her she was out of order so they could put it all to rest. Instead it never got talked about and it's festered. This is your SO's mother, get him to put her in her place. She might be annoying, but work on communication - always address her narcisistic actions so she learns - you've had a 21 year advance warning, she won't get any better unless you do something about it and your son will probably appreciate that more than being in a situation of family resentment his whole life.