What do you do when you can’t stand the negativity?

No. There is no point incoming up with a fun and distracting game. Sometimes it's okay for certain people to humor in such a situation. Those people are paid caregivers and the only reason why we do it is so the work can get done as smoothly as possible.
If she is safe in her living situation, then you can stop visiting and taking all of her calls.
If you and your husband go over there and a rant starts up, walk out and leave. Then don't take her calls. Let them go to voicemail.
You're only a human being. At some point the viciousness and asinine ranting gets to us all. You don't have to be around it. If her behavior gets worse the housing will tell you and then it will be time for a nursing home. Don't beat yourself up with guilt about it.

Basically you understand that you are dealing with a broken mind. You leave.
Tell Mom you love her and want to visit as long as your visit makes her happy, but when she is not happy you will have to leave. Then do so. When she starts on the nonsense tell her "Mom, our visit isn't making you happy, so we will go and we will be back in a few days when you are feeling better". Kiss kiss. Hug hug. And go. And make your visits fewer and farther between.
NOTHING WILL CHANGE this. Her mind is broken. If she was once a happy and well adjusted person, then this loss is a tragedy to witness. It is one more loss for her in a life that will soon enough be ended after loss after loss after loss. It is sad. But it cannot be fixed.

My MIL (BEFORE she developed the dementia) was absolutely horrible to me. Just nasty and painful comments. I was instructed to "just take it, she's old".

Well, in 1980 she was 50 and doing this, so no, I don't attribute it all to dementia.

Last year I went with DH (he was going to pay me $100) to keep him company while he once again fixed her computer.

She was just on me like white on rice. Nasty, horrible things. And there I stood, on a little brown throw rug she used for her dog. I was not allowed to sit down, I had to stand. After about 1/2 hr my back was screaming in pain. I asked for a chair and she refused, DH said "Crying out loud mother, let B have a CHAIR!" You have thought I asked for a pint of her blood.

Long story short, neither she nor DH wore their hearing aids and were shouting back and forth and it was really unpleasant for me, b/c in between their comments, she was slowly but steadily running me down.

The final moment came when she asked me when my cancer would come back and I would die...I couldn't believe this--WHO DOES THIS? I looked at DH and he hadn't heard her.

I got up, slapped her on the back and said "V, I am giving you the gift of your lifetime. I'm going to leave and never see you again. Have a great life". I took a Diet Coke out of the fridge (she had denied me one, but gave one to DH) and I slammed out the back door and walked to my sister's.

Haven't seen V in nearly a year and NOW Dh gets it. She picks on him, is mean and hateful---and has broken his heart. He begs me to come with him when he simply cannot deal with her, but I'm DONE. 46 years of kowtowing is enough, thank you.

Yes, NOW her brain is broken and there's not point in even talking to her. So why should I take myself into that toxic and painful place?? She's NOT my mother, she hates me and I don't need to have that in my life.

I can do this b/c she IS NOT my mother. My own mom? I pick and choose my visits, full well knowing she doesn't like me nor want me around. When she gets mean, I walk away. But I feel obligations--to a degree with mother that do not exist with MIL.

I would tell her every time she brings him up to STOP or you will leave. Then follow through. If she is still living independently then she can get the point that trash talking your husband only leads to you leaving.

Maybe it is time for an assessment and a move to get more care for her.

You DO NOT have to entertain the hatefulness that she is spewing about your husband, broken brain or not. If it creates to much stress and upset for you then you need to tell her to stop.

Maybe she can’t help it but that certainly doesn’t mean you have to listen to it. I’d leave or get off the phone each and every time it happens. Though it may never sink in, tell her you’re not listening to any negative or rude talk and leave. Sometimes people just say “I’ll see you when you’re feeling better” and then go. This becomes about preserving your mental health. Sorry you’re dealing with this and wish you peace

My husband has been diagnosed with dementia and early onset alzhiemers. He had gotten extremely abusive before we finally were able to get him to a dr for the diagnosis and meds.
This past week he became short tempered, fussing about everything and in general driving me up the wall. I noticed tonight that he hasn't been taking his morning meds. I ask him usually every morning and evening if he has taken them and he says yes. He has an appt with his dr in 2 weeks and I am going to ask about adjusting his meds.
He has been accusing me of stealing "his" money and blowing it. Every 3 months the statement comes in and I give it to him to go over in thM hopes that it stops the accusations. It hasn't. He talks to our children sometimes and when they tell him something that he has already been told he denies I told him. Or he says I told him something completely different. It's not going to get any better and I know how bad it can get since I went thru this with my mom and started caring for my husband during that time also.
I told my dr last week that I wanted to climb into my car and drive until I was forced to stop and rest. I don't care what direction, any would be wonderful and somewhere I might find peace. He puts everyone down, refuses to talk to anyone unless they come here or call for him specifically. I remind him to call his brothers and sister and sometimes I actually dial their number and hand him the phone as soon as they answer. They don't know I am behind his calls to check on them. I too am tired of the "humor them", "think like they do" info. My dr put me on meds for depression and said I need rest. Yes, I knew that but, how do I get it? I can't leave him here alone or he tosses things out and I can't find things. He won't eat if I don't cook or buy his groceries, he won't bathe if I don;t try to get him to and he will try driving even though he was told no more by the dr. Our kids work long hours and live 1/2 hour from us and have their families to care for. We have paid for our final expenses and told our kids DO NOT TAKE US INTO YOUR HOMES TO CARE FOR! MC will work just fine for us.

I think you know the answer -- her brain is broken. She can't abide by your rules, because she won't remember or understand them.

Her. Brain. Is. Broken.

What you choose to do with that is your decision. You can try to guide the conversation by simply not "hearing" what she says and talking about something entirely different as though the conversation was always on the other topic, but getting angry is pointless. She can't help it.

One thing I've heard of some people doing to get their loved one off a particular track is to get up, walk out of the room for a minute (or even just out of their sight), then come back in as though it's a whole new visit. Sometimes that works to reset them a bit.

No point at all in setting ground rules for your mother, but you are perfectly entitled to get up and leave if she starts on this theme. You could try leaving the room rather than the building, go back 5-10 minutes later, and introduce a different subject. If it's not helping you can always still leave.

I wonder why she's picked on him to be her pantomime villain? Is there another male figure handy you could have a go at substituting?

What exactly are her attacks on your husband? Does she accuse him of stealing from her, does she attack his character or complain about him I other ways like he's having an affair? The hallucinations you can apparently deal with, but the attacks you cannot. Because she has AD, she is more than likely delusional regarding her beliefs. You say entering into her reality isn't helpful. Have you tried that? Have you said anything like, “mom, I'm going to talk to him about that and bring it to an end. And I don't want you mentioning it anymore”. With her AD, of course, she may not respond to that, and if it continues, I would just reduce the times you visit her. Setting ground rules would be for your benefit, not hers. She wouldn't remember to honor them.

Her having hallucinations and delusions can be very dangerous for her and would cause me to consider a higher level of care. (Actually, if she's in IL, she's not getting any care). It might be time to consider assisted living at the least.

I seem to say this a lot, but here goes again... Get industrial strength ear plugs, put them in while you are there (and there for DH's sake), and you won't hear all this rubbish. Just smile!