Oh gosh let me start by saying this is going to be long and I am quite embarrassed to be posting about what is not the best situation in our lives right now but you guys have always been so sweet and helpful when I have needed advice in the past and I am hoping you can come through for me now!
Here we go:

MIL and FIL have been taking care of LO and things have NOT been going well. My FIL and I have always gotten along quite well and so have my MIL and I but I wouldn't say that my MIL and I are close. She is not the friendliest person and tends to say what ever comes to mind even if it is extremely hurtful (has made comments about my weight, told me I was hurting the baby by getting sick when pregnant, told me she is sick of LO and needs a break to name a few) I don't think she means to be mean I think she just has zero filter and blurts things out without realizing how hurtful they are. DH isn't close to her either so it has never been a big deal that we aren't close. We are always pleasant and cordial to each other and up until now have coexisted peacefully.
So here is what has happened: The last two months they have been taking care of LO. They are our only feasible option for day care at this moment so we have been EXTREMELY thankful for their help and have told them so repeatedly. The problem stems from trying to communicate with them over the care of LO and our house and it has not been going well. DH leaves early for work and comes home late so I have been the one that has had to communicate this with them. I have tried to do so in a respectful manner but the things we ask have all been taken in a defensive manner or disregarded. The thing is we really aren't asking a lot and I don't get why it has blown up. The only three things we have approached them on are his feeding, using diaper ointment and respecting our privacy by staying out of our bedroom.
-I am breastfeeding and pumping at work. For the amount of time I am away LO should be eating 10-12 ounces. I usually am able to pump between 12-14 and at first we were just leaving it all for them figuring he wouldn't finish it all. The problem? He did finish it all and then they would break into my freezer stash for 4-6 more ounces which meant he was getting 18-20 ounces a day. Clearly this is too much and there was no way that we would be able to continue breastfeeding if this kept up. We talked with them and said he was getting overfed and they had to keep it down to no more than 12 oz. After this they started only feeding him 6 oz a day. Arrg. So we talked to them again and told them to stay around 12 and guess what happened? His bottles per day crept up to 18-20 oz again. We finally got firm with them and told them no breaking into the freezer stash (we usually leave them 14oz so it is already more than they need) but they do it anyway.
-LO needs diaper ointment at every change or he breaks out into a raging diaper rash . We don't want to use powder because of the warnings about it and because it doesn't do a great job in preventing diaper rash in my opinion. This has been the source of MULTIPLE conversations trying to convince them we didn't want it used. Unfortunately we had some in the house that DH used when at his job. We would put it away in the cupboard but MIL would go hunting and find it and use it. Finally we had to throw it out.
-MIL and FIL come over to our house to watch LO (have to do this as their house is not safe for a baby) It is hard having people up in your space every day and maintaining a sense of privacy can be close to impossible. We have asked them to stay out of our bedroom and close the door to help with this just to have one spot where we don't have to worry about them seeing our personal items. Despite this MIL goes in there multiple times a day to "look for the cat" who has on occasion gotten locked in there. I don't know why she feels the need to constantly check multiple times a day and can't understand why she can't respect our privacy despite DH asking her to several times.
There is so much more to this obviously (walking into the house uninvited, digging through our laundry, looking through our cupboards) than what I am able to include but those are the main issues and the only ones we have chosen to address with them. This has all led up to a lot of frustration on our part and a feeling of being disrespected. DH who hasn't done a lot of communicating with them over all of this finally decided to have a conversation with his mom the other night. What he found out was that she is mad at me and feels like I scold her about everything and don't respect her abilities as a mother. **sigh** needless to say I didn't take this well. I have been pushed to the brink dealing with her unfriendliness everyday, having my privacy invaded and feeling like our wishes are being completely disregarded and disrespected. I have tried to be nothing but kind and thankful especially when asking them to make changes and keep everything else inside so I am somewhat baffled by the fact that this has earned me so much ire. Things were tense between us until the next night when she confronted me about all if this. I was respectful, didn't raise my voice or get over emotional, and didn't argue but I did let it fly (probably shouldn't have but I did) and I told her pretty much everything (eek!) For her part she argued, denied, talked over me and switched topics so often I had trouble following her. She went from telling me she loved me to telling me that my BIL won't come over to our house because he is scared of me (thought BIL and I were friends, have NEVER had a problem with him) to telling me I disrespect her abilities as a mother . In the end despite the fact that nothing had been solved and no apologies had been given she said she wanted to start fresh. Ok kinda hard but I am MORE than willing. When they came over this morning though MIL refused to come in the house until FIL joined her ( he usually drops her off and then parks the car) and neither one would really talk to me. I am hurt and sad that things got so out of hand so quickly. DH is baffled as well because up until the last two months our relationship has always been great. I am quite certain that we should have handled this better (probably shouldn't have told MIL everything that was wrong for starters but it kinda came out) but I am really not entirely certain where I went so wrong. I am also so confused by the severity of their feelings that I am starting to wonder if we were inconsiderate in asking those things. Basically I am a mess. DH and I are horribly stressed and it is affecting our relationship and I am horribly hurt and offended that things would be so bad with people who are so close to us that I thought loved me. I don't know how to handle it and I don't want to make DH get in the middle either because I know he loves his family. Please advise me Bees what should we do?