Hi, cpatlew
This situation sounds really stressful and sad... . I'm so sorry you are having to deal with it! But, isn't it the coolest thing that you are getting to see at least 2 of your grandkids after three years?
How to handle something like this if it happens again? Is it possible to validate GS's pain in missing out on the cousins and Grandparents, listening and comforting him and saying how sad it has made you, too, not being able to see him? And, instead of either validating that you and daughter were at fault or admitting to it since it's not true, just say that now things should be better and everyone will do what they can to make sure that "no contact" won't happen again?
He sounds like he really has absorbed all the pain and stress that this conflict with DIL has caused, and you and your family need to be there for him... . Especially since you are hearing/sensing that there is more of it going on inside his home that doesn't even involve you. He needs you so much; as he gets older and more cognizant of what is really happening he will even more... . I'm really sorry for all this pain, and so happy that you are there for him and at least contact has been reinstated... .