NO,NO,NO! do not give up hope. Allow her the space and validate, as you've said, her views that the M had problems and at this point is over (in its present form but don't say this!). By doing so YOU ARE working on your M. You are taking a new route, that's all. When she feels less pressure she may see you in a new light. Go ahead and set your goals. Think about how will you know things are getting better etc. Again, I think what you've just done is fantastic (and difficult work) and for the first time she's saying she WILL work with you on something (your "friendship and your son). That is amazing news!!! Go with what she's offering, it's a start. Don't quit now. Detach for yourself but don't give up.
P.S. I hope I'm making sense here! I'm sneaking this in at work so I'm rushing. So let me know if I need to clarify. I want this to work for you Muddle!