L D,
Wow. This thing is LOADED. You definitely need to address some things, but what I do wonder about is your circumstance when baby 3 arrives. Either way, you'll need to take some time, make a note of what you want to cover with her, then proceed with as few hurt feelings as possible.
My first response would be if you need mom's help when baby 3 arrives, then you need to establish some ground rules with that in mind, and probably avoid evicting her at this time.
First, you say that she is a wonderful cook and you enjoy the meals. While I sympathize with your dilemma of having to clean up after her, I also realize that someone MUST clean up the kitchen no matter who cooks. Is it so bad if you don't cook, but have to clean up the kitchen? I mean most of the time, we moms must cook AND clean up the kitchen. Rather than let irritation take over in this instance, you could go out there with her and clean as she goes, rather than the usual clean as you go, that we usually do.
Put a stop to the sleeping arrangement. Explain to mom and the 3 year old that this is not what we do. Sleeping with parents/grandparents is a treat, to enjoy say, on Saturday nights. (or even ONLY at Grandma's house - reinforcing the difference between home and Grandma's home) Further explain to mom that you don't want the torture of breaking the co-sleeping habit when she goes home. (and say it like that - lay the groundwork of the expectation that she will go home.) Co-sleeping is a hard habit to break, especially if it goes on at length.
Further, in your ground rules, you'll want to add that Grandma's (I'm not sure what her name is with the children) rules MUST be the same as mommy's rules. While you understand that at Grandma's house, the rules are often different and less restrictive than they are at home, that too, is a special treat - a bonus of being at Grandma's house. At home, the rules are Mommy and Daddy's. Period.
Then comes the job situation. You should tell mom that you would be happy to sit down and help her tweak her resume (or curriculum vitae as they are now apparently calling it) so that she can find a suitable job. In this matter, you may have to be explicit and firm. Saying for example, "my husband and I are not in a place in life where we are able to support a family of six, or to support your retirement. We had planned to be "here" in life, I plan to return to work "here" and we are not in a position to alter that plan. Finances just won't allow it." You might set up a time each day to sit down and scour online job postings, newspaper advertisements, et cetera, and respond to agreeable postings. It is possible that if you don't take the initiative in this, she will simply not look for any position.
Right now, Grandma is railroading you. Granted, it is probably not be a conscious, deliberate railroading, but she is in effect, running YOUR house HER way. If you do not think you'll need the extra hands when baby 3 arrives, you can pretty much skip to the issue of the job situation. All the other problems will cure themselves, because she would no longer be there, anyway.
There is probably no way to address these things with no hurt feelings, but you can certainly minimize them by carefully approaching each subject with reason and calmness. Best of luck to you with this and with your new arrival!