Hello Crying,
This is Seeker and I just had to write to you. My family has just gone through the exact same situation. Exactly.
You wrote:
One minute he understands just how she is and the next he is trying to excuse her behavior, etc.
Rosencranz was right on the mark in saying that your son has divided loyalties. What's very difficult for him is that in seeking support, of course he will come to his family (of origin). And of course it would be very hard for the "other side" in this case, your DIL, to believe that you could be neutral. Unfortunately, if you advise your son to seek counseling (a wise suggestion), any cooperation from your DIL would be seen as a "defeat" by her. I am guessing that she has a big problem with trust, but know that this does not make YOU untrustworthy. So you don't have to prove yourself trustworthy to a person unable to trust.
I told her that I would talk to her with both my son and my husband present. I am tired of her lying about what was said. They should both hear what is actually said.
I do think it is wise to have witnesses when dealing with this kind of personality. If you do decide to go ahead with a "discussion", you might want to ask your husband and son just to listen. I agree that a discussion of this type can go downhill pretty quickly. If you decide that you need to at least attempt this communication you might want to read "Difficult Conversations" AND "Stop Walking on Eggshells" to prep. (They make good reading in any case...) This will help you know how to respond without escalating things and hopefully help with any defensiveness that her provocative comments are sure to stir in you. These books will also help you set your own expectations.
Know that you cannot change her. Perhaps you can understand her if you want to help yourself feel more comfortable and knowledgeable about what is happening.
In my NSIL's defense (god, am I really saying this?): the hard lesson my dad had to learn was that even though he can be counsellor to others, he had to be dad in this one and know that he wasn't running the show, even though he was invited to be by my brother. He needed to learn that he was inherently DISQUALIFIED from solving their marital difficulties.
Consider that the best course of action might be no action. Because the fewer things your DIL can scapegoat you for, the sooner they'll realize they need to look at each other instead of you. And that doesn't mean you don't care. Perhaps tell your son that you trust him, love him, and are praying that he and his wife work it out and that you'll be there when they are ready. I know it's hard for mothers to detach. That's really a challenge. God has a plan for them and sometimes it's not what WE want or the way we think it should be. But it is what it is.
And ask yourself if you need all this drama. Ask yourself what button of yours is being pushed. Is it hitting on your definition of Good Mother? A need to be needed? Of wanting to be of help and a positive change? Don't get me wrong, these are all worthy banners to be displayed. But what I'm learning is to curb my own knee-jerk responses to these weird situations. A new response might be needed here.
An eyeopener for my parents was to realize they weren't The Family anymore. My brother (and I) have our own families, of which they are included of course. But we are not children anymore, we are adults making our own choices.
Interestingly enough, as we all backed away from my brother's difficulties, we became much calmer. The world didn't end!

We also realized that he is doing just fine without our intervention. He is an adult and needs to take responsibility for himself and his decisions, and we need to trust him to find solutions. I believe he is seeing a professional for support. Of course, I would also imagine that this is more/different grist for the mill for my NSIL, but that's the point: same game, different players. Do you need it? For myself, I am glad to be off the merry-go-round and focus on my own life and goals, and caring for my own recovery from this experience.
I hope this is helpful. Take what you can use...and good luck to you and your family, S.