It's a difficult situation, but I would go with the "my house - my rules". And I would say so. I've always done that with my nieces and nephews and now with my own grandkids.

If you find a solution, please let me know. My grandbabies are 5 & 6. If they are here with only me and hubby I can discipline them, usually does no good. I tell mom and dad later what happened since they are old enough to tell. Mom's look could kill me, dad's is one of satisfaction. The problem is, she is my daughter and she gets mad at me. I told her from the very beginning, my house, my rules, if you don't like it, keep them home. My husband disagrees with me and only causes more problems. Let me know when you find the solution. I stay frustrated.

Life is pretty simple.
If people are going to be angry with you - - let it be for the right reasons.
My mom used to tell me that she faced a higher judge than I regarding my discipline (when I was being raised). Until you become a parent you never understand how much you are responsible for.
If daughter gives you looks that can kill, it suggests to me that she has some growing up to do. Until we learn to yield to authority, we really don't do a good job of brandishing authority over others.
Maybe daughter is learning a new respect for you - - as in you are taking stands you didn't use to? Perhaps showing more individualism than she understood you had?
And, an interesting thing I found with my adult children - - when they want ME to do what I do, they come around. When they don't want to HEAR ME - - they go find someone else to talk to <g> - - after all these years, they know who I am and they have a choice - - deal with mom or find someone who thinks more like you.
Does that make sense? <wave>

I adore my one and only grand but when she was two she became Miss Queen of the World over night. Her mom and dad, me and DH ignored her completely when she threw a fit and when she did calm down she was taken straight to bed and told she must be tired from all that crying so she had to go to sleep. It didn't take long for Grand to realize if she threw a fit she had to go to bed. Kids have to realize bad behavior brings consequences they do not want. Grand is now 13 and you can see her little brain working before she responds negatively to her parents. LOL

When my 45 year old son was 3 he tried to throw a tantrum in a grocery store. I walked over to the drinking fountain, filled a little paper cup and splashed him in the face with the water. He never did it again and from then on was a little gentleman when we were in a store.

my dd started at 18 mos holding her breath and suposedly pass out when things did not go her way. I would just catch her and wait. this went on until age 2 she pulled away from me , fell hit a curb and put her bottom teeth thro her lip. Never again did she hold her breath.

the doctor said to ignore and once she gets hurt, it will will stop. He was right.

Nope I speak my mind weather my kids like it or not. Just like the two year old needs to learn so do the adult children, and yes my parents to give me unwanted advice. They are older and they have been there. Advice is just that advice, take it or leave it. If your offended then I guess you need more advice on how not to be offended. I'm sure theres a tactful way to handle this situation, but I tend not to be tactful, my house my things my rules.

I have been thinking and went back to the original start of this thread to see if my responses have been directly in line with what Pam was asking.
Having read it again, I saw something else that I had not considered.
If you don't step in to defend the 3yo, you are teaching him that he is not worth as much as the baby ... so that would be a very good reason to intervene. You can counsel daughter as you have, and, I think you should - - if she doesn't want to hear it, she won't be coming around.
I was noticing the laptop story, and I thought - - why would grandma allow a baby to threaten her in any way, shape, or form.
I know that you maintained control of the mouse because you were bigger and stronger than the baby was, but he is growing - - and you aren't. One of these days, he will be able to wrestle the mouse away from you, and when he decides to hit you, it will be your fault that you got hit because if you had just given it to him in the first place, he wouldn't have had to hit you (the reasoning of a bully and abuser).
My father told me (while we working animals) what is cute when they are babies, isn't cute when they are 1200 pounds, and you have to always train with the final size and product in mind. (The same is true of humans - - I have probably stressed this before ...)
Grabbing YOUR mouse is rude - - and, you have the right to keep your own property and no one has the right to take it from you ...
You need to be secure enough in your own personage that you can tell your daughter, "Honey, I love you, and I love the kids, but as human beings, that littlest one is not very likable ... we need to find a way to train him so that others will enjoy being around him. No matter the age, there is no excuse for bad behavior." <wave>

What Omak is saying. So much truth and wisdom in this.

Isn't it tough? My rule was always along the lines of "this is my house and here you will behave this way" When my DD started to object, I just asked her how she turned out!