How do I deal with a mean and hateful Grandmother?

My grandmother has never been easy to deal with, she has always been demanding and not easy to get along with. She has driven her son and her daughter (my mother) to not come around that much. Also her great-grandchildren (my children) refuse to go around her.
My husband and I were having problems and we are separated (but we are working things out). I agreed to move in with my grandmother because she needed someone to look after her, she isn't doing well she has COPD, Emphysema, and other lung issues. She cannot go from the table to the kitchen without stopping because she gets so weak and can't breath (she is on oxygen 24/7). I almost lost her twice once in January and once in February because she caught pneumonia and her breathing.
I have been with her now 3 months have only spent 1 night away from her (for work), and I try to see my husband for a few hours 5 to 6 days a week after work and on weekends, and am home with her every night. I have am the one that takes her to the hospital, mows her grass, cleans her house, does her laundry and dishes, she hates my cooking because its "to spicey" so she cooks. She has always been mean, but she is getting worse. She hates it when I leave for a few hours and tells me to move out. She has told me repeatedly that she wants me with her all the time, right after work and Saturday an Sundays. I am home by 8:30 every night, and right after work for 3 hours. I told her that my husband and I are working things out and she is negative about it, she is negative about how I do things how I cook, clean, drive...ect.. its seems that as soon as I wake up or when I walk into the house or if I breath it aggravates and she is in a bad mood, the only beings she is nice to is the animals. Anything i do around the house isn't right (i am 42 years old and I know how to clean a house, she used to tell me that my house is to flipping clean), and i explained to her i have different ways of doing things and i will try to do them the way she wants since it is her house, but to no avail its still not right and she yells about it. I have told her on many occasions that she is being mean and she needs to stop it. She just glares at me, then things are better for a few days and its right back to it. The other day I ran to the store because she was starving and she wanted bananas and brownies...I ran to the store and my husband was there so I talked to him for about 20 minutes, when I got back to the house she asked me what took so long, I told her the truth, she yelled at me, said a few um things I won't mention and then said she will never ask me to do anything for her ever again.
My mother says she wants to put her in a nursing home and I told her that is up to her, its not my call since I am a the granddaughter. She said she is talking to my uncle about it, and I told them not to be put in the middle of it, because it would get worse for me.
My grandmother told me that if I ever move out of the house then she will never speak to me again, then she tells me to get out, because I am seeing my husband a little bit a day.
She talks so bad about me to her friends who she doesn't see to much anymore (church friends), because she doesn't want to go do anything since it is so hard for her to get around. Her friends have come up to me and hugged me and said its all ok and they know I am doing everything I can for her. One of our long time friends that lived across the street even told her kids on her dying bed with me there that my grandmother has always been mean to me (she raised me by the way), and that I am the only one she is like this to.
Help!!!! My counselor suggested I be put on medication to help deal with this.
Thanks