Here are pics...Gah. It doesn't look NEARLY as bad in the pics as it does in person...

oh, so sorry. Hope some of the suggestions work.

Tell her what happened. I think I would pleased by your distress if I were her. That sounds awful but you know what I mean.

Try to salvage it. If that's too stressful for you now (completely understandable), make her a mug rug or a Christmas ornament. Something easy and sweet.

So sorry.

just saw the picture, that's not that bad, try ironing it.

Woah!! Right when I posted the pic came up. Honestly, I can see the difference, but it does not look that bad. She does not know what it looked like before it was washed.
I agree that it prob not as bad to others as you because you know what it looked like before.
It looks cosy and I love the fabrics you used.
IMO she will love it.

Just saw the pix. Best I can tell, it looks wrinkly. A lot of people like that look.

Is it worse than wrinkly (my eyes are bad) or awkward to fold or wrap around you? Weird chunkiness going on in areas?

I know how you feel, I had the same thing happen to a quilt I made for my daughter. It was black, white and red, more of a young persons color and design. I washed it before giving and it shrunk 5-6 inches. I was very upset, had to work really hard not to cry. The shrinkage ruined the young design, young people don't like the traditional quilt puckering. Well, I guess I should say my two daughters don't like the puckered traditional look. Personally, I like the puckered look. Is your concern that it puckered or that it shrunk too small for your MIL's bed?

Ummmm, it looks fine to me. A little pressing, maybe? My quilts all come out of the wash looking withered.

That would be my question too. I have never actually touched the wool batting so I wouldn't be able to tell.

When I make a quilt I actually love when it shrinks a bit and puckers up because that hides the imperfect quilting stitches.

I just realized that you posted pictures and honestly, I don't see a problem. The quilt looks exactly as I would expect after a wash. It is really pretty.

Next time, you may want to do a little more quilting and the pucker effect won't be as noticeable.

I agree. If the batting shrunk, stretch it. What size quilt is it?
Get the quilt wet and stretch it to air dry. I don't know how you will keep it square while it dries. Maybe put a box fan on it to dry it faster.
But, if stretching it works,,,,,,,,,,, seems like she will have to stretch and air dry each time she washes it. Is it for use or decoration? Lots to consider.
How is it quilted? I generally would rather make a new one than rip out a whole entire binding, sashing and quilt top/bottom. Lots to consider.
I am sorry this happened. I will check back to see how it turns out for you.
On Edit:
Mann, we are all on our keyboards at the same time. Look at the times of our post. Then the photos are loaded when our posts are in.
So now, with the photos. It is such an absolutely beautiful quilt. Do you have a work station you can imprison it on? get it wet, stretch it, keeping it square and pin it down to your work station until it air dries. I still fear she will have to do it the same way when she washes it. If it drew up on you it will draw up on her. But, stretching it wouldn't be a problem for me and it may not be a problem for her. She may never wash it, just have it for a look and don't touch. It really is a beautiful quilt.
Do you still have the bag the batting came in? A call to the manufacturer might not hurt. They may have some suggestions. I would want to know if it is going to keep shrinking each time it gets wet.
I am really sorry this happened.