How do we handle our annoying, religious zealot daughter-in-law?

She is a member of the Church of Christ, but takes things so far they are dividing our family. She won't cut her hair, won't wear pants, won't allow Santa Claus and the Easter Bunny, yet allows R-Rated movies in her house with her 2 and 4 year olds and lets them trick-or-treat! We seldom see the two kids (our grandchildren) because we have different religious beliefs than she does. Her house is FILTHY as any I've seen and she is either on the phone or running to church events instead of spending time teaching the kids colors, numbers, etc. They are behind in their education and our son lives in a horrendous mess. He is torn between her and the kids and the rest of his family and works 60 hrs per week at two jobs. She only works a few hours a week yet can't manage to keep house. Is Church of Christ really THAT strict? "Women should not wear men's clothing"---does that refer to slacks? She's just over-the-top in our opinion and is tearing our family apart. What can we do?