nuah.. just read yr post on C 'seeing things'. Actually I also suspect my boy 'sees' them too and not only on 7th mth, thou it usually get worse on the 7th mth.
In the past, he used to suddenly cry suddenly in the middle of the nite and behaved like possessed... we had to hard time catching him and holding him back, he will keep on crying and say he wants papa even thou papa is carrying him.... we tried all ways to stop him and usually he stops when I put the fu (being a Buddhist) and on the Buddha chant... he can suddenly cool down & go back to sleep. Sometimes I will shout to ask them to go away and dun disturb him (this was taught by some elderly) - sometimes work sometimes dun - then gotta use the Buddha chant.
Just last Sat, in the afternoon, he was napping, and I was trying to make my younger one sleep, he can suddenly wake up and kneel down in front of the window and duno do thoe 'haliluya' stuff, both hands high up... my younger one find it amusing and join in, then I asked him what he's doing and who's there.. he told me 'king kong'. I'm still trying to find what whehther this 'king kong' stands for anything.... cos everytime I sensed he's looking at something, I'll ask him who/wat he is looking at, he will reply 'king kong' then laugh and divert the topic.
Beginning when it was quite serious, my mum would also come & pray to the bed god to make him sleep better.... it does work.
However, mine is the Buddhist way, so not sure how Christian handle this.... since your mum already asked and said its yr hubbys grandma or wat... maybe bring C to pray to them & asked them not to scare her? Can come visit but dun scare her?