Your experience of MIL's death reminds me a lot of what happened when my H's MIL died. Everybody in his family talked as though she was such an amazing, generous woman. In some ways she was, but my H felt that she unleashed her anger only on him as a child, physically and verbally. Of course, he blamed himself. When he got the call that she was--quite suddenly--probably brain dead and the family needed to gather to agree to take her off life support--he flew to his home country. He fell immediately into a depression, and couldn't even bring himself to buy a return ticket days after the funeral: his father had to remind him that he had his own family to return to.
You say you wish you'd handled your H's grief differently. I'm not so sure it would have made a difference for HIM, although it would have altered how you felt about yourself during that time. I'd gone through the death of a parent, and prepared myself to be extra gentle, nurturing, and really be there for him. Instead, he was like the boy in the bubble. Nothing I said to him got through. He didn't want to be touched or talked to. In a listless, passive-aggressive way, he made me feel as though everything I said or did was the wrong thing. His MLC had started, and he wouldn't really begin to connect with me again for 4 years.
Like you, I wish I'd reacted differently. I don't think anything would have changed for him--he had to start to deal with his mother's abuse. I wish I could have detached sooner, and not buried all loving feelings towards him under steadily growing feelings of rejection, anger, resentment, loneliness, etc. However, none of us should blame ourselves for how we acted in the past--like our H's, we did the best with the tools we'd been given up to that point.
GAG, I think Sanderika is spot on: how your H reacts to his mother's death depends entirely on whether he still has unresolved issues with her. It would definitely be worth trying to get him to talk/think about this before she passes. Do you have a sense of what the issues are which drove him into an MLC, and is there a connection?
Other than that, you are amazing and are doing such a good job of rebuilding your friendship (and of supporting your MIL)--good on you!
