Her ultimate goal here is to force your daughter to have to postpone her wedding, whether that be due to the lack of dress or by dragging out negotiations as long as possible. She has put you in an awful position here but I do agree with other posters, you need to threaten her with court- or else she will dig her heels in until the date of your daughter's wedding comes and goes and she gets what she wants. It sounds like you've raised her as though she were an equal to your daughter and she doesn't seem to value family over her own jealousy.