Three things:
1.) No contact means no contact. Do not answer the phone when they call. Throw their letters and packages directly into the garbage, unopened. "RETURN TO SENDER" is a form of contact. No contact. DH should not talk to her either. The time for talking is done. If he chooses to talk to her/them, he should do it from his own private cell number and email address. You should block her on Facebook (it's under your privacy settings) as well as your FIL and anyone else you think might be sympathetic to her lies and stories. Stop giving her and her allies access to your life.
If possible, block their phone number(s) from calling you (call your phone company or cell provider to find out how); if not possible, put their numbers into a catch-all "DO NOT ANSWER" contact, the same place you put known telemarketer numbers and other assorted annoyances. This makes it much easier not to answer the phone no matter how steaming mad you are at them. You might consider changing your number(s) and keeping the old one(s) and just letting the voice mails pile up. Your stalkers never know you changed numbers because the old ones are still active, and you don't have to be afraid to answer the phone. Read Gavin de Becker's
The Gift of Fear for more helpful hints.
Do not discuss them with mutual acquaintances. Do not discuss them with anyone but the police, which leads me to...
2.) Restraining order--it's time to get one. Your MIL's behavior is escalating and at this point I would be fearful that she may try to actually harm you and/or your husband and children. Get it on record with the police that she is actively stalking you, harassing your mother, and otherwise destroying your peace of mind and sense of safety. Seriously, go to the police station in person and find out how to get a restraining order against this person. I know it's intimidating and seems drastic, but the police are used to dealing with this sort of thing. A restraining order is just a piece of paper, but if she violates it she will spend the night in jail. With sociopathic/delusional types like your MIL, sometimes this is what it takes to show them that their insanity and abuse WILL have negative consequences.
3.) It's time to let go. This woman and her husband are clearly mentally ill. They will not change. They will not suddenly see the light and stop being crazy. They will never come around. I know you understand this, and your pastor is helping your DH understand it, and his therapist will too--and that's good. But you really have to internalize what it means to stop caring about their opinions, their lies, and what they say and think about you. Fuming about them and worrying about the latest smear campaigns and lies they spew might be satisfying for a while, but it's actually very bad for your well-being and mental health. Don't let these people's toxicity seep into your life. Don't focus on what they say about you, and don't let well-meaning or meddling mutual acquaintances tell you what they're saying about you.
It doesn't matter.
Let them go. Decide that they are dead to you--because they should be--and once you've taken the necessary steps to keep them away, cut the emotional cord that keeps you wondering what they're saying now. And then give your DH the biggest hug in the world, because these people were
his parents--he grew up in this craziness, and of
course he's in therapy because that's what you have to do when your parents are toxic like this. He's probably the strongest and bravest person you know, and pretty much no one in the world is going to give him a medal for walking away from these lunatics, even though it's clearly the right thing to do--because they're his parents and for some reason, parental abuse of adult children is considered more acceptable in our society than severing contact with those same abusers.
Huge hugs to you and your family. Things might get worse before they get better--but then life'll be so amazing and sane that you'll wonder why you didn't walk away years ago.
She then said she did NOT apologize for contacting my mother on multiple occasions. She seems to feel since they are both grandmothers it is appropriate to contact her as she pleases and share personal information.... Then she said that her and FIL have tried so hard to be nice to me (
) and that all of these problems stem from me and I have always tried to keep them away from the kids... and now I am trying to take their son away. After he has told her sooo many times that HE wants the space. After I dealt with countless family dinners, bbq's, holidays, etc etc where they belittled my parenting and personal choices. 
Hello, we must have been separated at birth.
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