She's driving us crazy! Does everyone deal with this?

I'm 28, my boyfriend is 30. We're looking after his 89 year old grandmother, and I feel like she's killing us.
She has colon cancer, and had radiation treatment about two months ago. Reforming her diet has been our goal, since she was living off microwave dinners and packaged food for god knows how long. Without going into too many details, I'm positive that her poor diet and sedentary lifestyle was a huge part of the cancer she developed.
Food is a constant battle. Our love of food and cooking is being destroyed. We barely eat anymore. Spending anytime in the kitchen just opens a huge door for her to let the insults fly, and I'm not even sure if she understands how mean she is. It doesn't help to try to talk to her, she immediately checks out and goes blank. Much in the same way she treats her doctors when they discuss her diet.
We've been making compromises, trying any avenue to find nutritious food that resembles the food products she used to eat. We make meals interesting and colorful without going overboard on exotic flavors. We try to include as many freshly prepared vegetables and fruits as we can, since that's one of he greatest things you can do for her cancer.
Most of what we make for dinner she deams inedible, and will angrily put herself to bed around 730 on an empty stomach. She throws temper tantrums about not having " any food in the house" or "everything here is crap".
Despite all this, she's still recovering and getting stronger. Which is directly correlated to the level of complaining. Up and up.
It's been going on like this for months. She doesn't seem to understand that her diet is the only thing helping her frail body heal.
I'd feel like a criminal if I were to feed her all the products she wants. And even when we do cave, and give her the occasional TV dinner that she demands, she gets horrible diarrhea all over the house. And proceeds to complain about dinner. But she doesn't seem to be able to put the pieces together in her mind.
We are miserable here. We don't smile around here anymore. We can't talk to her anymore. She doesn't have conversations, just lists of demands and complaints. She needs full time care, so we can barely get an afternoon to ourselves to go grocery shopping.
I literally cannot feed her the things she's demanding in good consience. If she doesn't care enough about her health to even try eating better, why are we here? Why should we care? Nothing we do everything feels appreciated, the occasional compliment from her even feels like a lie.
This whole scenario has evolved from helping her survive radiation ( which almost didn't happen) to some kind of ritual punishment. I dread waking up in the mornings, because I know what I'll have to face. And her own grandson isn't taking it any better than I am. We try so hard to stay positive, for her sake and our own. But we're failing.
We came here to grant her her last wish to get to die in her own home, and gave up a truly wonderful life to do so. And I can't help but feeling that all our efforts are wasted. And she'd be happier in some hospital doped up beyond all comprehension. She's a very miserable person inside her head, and doesn't want to be any differnt. I'm at a loss here.