I'm very sorry that your children were not informed of the grandfather's passing. People can be so dense when it comes to separations/divorces and not tell family members of deaths, births, etc. because they don't know what to believe by the family member who actually did the splitting up of the family.
The people who walk out on relationships tend to vilify those who were left. Blood is thicker than water and when it comes to believing what they are told...generally they fall in line w/their family member even though we didn't do a thing wrong. Some day, hopefully, they will come to realize that it was him and not you and your children that created his situation.
You are a good mother and do not ever forget that. As for your xh and his family, well...this incident says it all for now...let them go, but pray for them. They need all the prayers that you can say.
Again, I am sorry for your loss.
Sit quietly, the answers will reveal themselves when you least expect them to. The past is gone, the present is a gift and you need to focus on today, allow the future to reveal itself when it is ready.