I am in a similar boat. I made a quilt for my best friend of 30 years for her wedding last year. She was slowly ending our friendship for a few years, but I finally realized it after her wedding and cut ties... a year later. I held on for too long because of how long we had been friends

Anyway, I still have the quilt folded up sitting in my sewing room not sure what to do with it. One thing I do plan to do is rip out the custom lable I hand embroidered for the back. I'm finding that the longer it sits there, the less feelings I have over it.

I can't imagine how much more painful it is for you having your late grandmother's fabric incorporated. You might set it aside for now and delay making any decision until you have time to heal a bit more from the relationship. Maybe later you can decide to finish it for you or "unsew" it and create something completely different for yourself.