It is perfect timing--all of it. You can show your kids you tried one way, the way that most would say to do. And it didn't work.
Now you are going into Poppa Bear mode. She IS being disrespectful and you MUST treat her with the disdain she deserves. Her behaviour is UGLY and TERRIBLE to those kids!! Call her out on that!!
I would start to be saying all this now. Prepare her for what is coming.
Then on vacation send her a one-line Zinger-- Something to really a. shock the heck out of her and b. Resonates a "truth" that she won't be able to get out of her head.
She will try to "argue" with that truth--you don't answer it or "argue" back. Just let it sit there and percolate.
I'll try to think of one--or you think of one. One sentence. Really powerful. Think on that for a while....