ok, let me hit the 123 in the order of what i think is most unlikely to most likely.
2. no way in hell, is this happening. in laws know things are tough and may be disappointed in you or have some harsh feelings right now. but i can't think of too many people, excluding jerry springer, that would allow this type of crap.
1. she isn't lying to you, she is lying to s. that is bad. but she could be doing it to protect him, if she is that shows she knows what she is doing is wrong. if she is using him as a medium, then you got bigger issues, back to the family meeting for s's benefit. i doubt she is using him as the medium, and if she was, what does that message say. it says, i don't want to hurt wc, which means there are feeling. so either way not likely and either way looks good.
3. i don't know if something necessarily happened, but at the least she may not feel comfortable spending the night with him at this point. but no guy is going to take that for too long, so that is a good thing. remember, the a will go south, it will bust and if your there standing in the good light then awesome. now if something did happen, well i tip my glass to you, because she will realize that she has a good thing with you, hopefully.