Have you tried asking her what she does to get him to sleep? Maybe there is something he sleeps with at her house that makes him feel comfortable?
You could look at is like you would look at traveling with him. WHen I trvel with my girls I always bring their pillows and blankets with us. That way they have a little piece of home to make them feel more at ease.
I know that sounds bad considering that he is your son and it is HIS home, but there may be something special at your mother-in-laws house that he has become attatched to.
I would just ask her. Maybe it's as simple as a certain song.
Although if this is happening all the time and not just at night then I would say you have a very clever two year old. He has figured out the system and just may be trying to get the same treatment from mommy and daddy that a granparent would give. You know what I mean? They are a little nicer and can afford to spoil them a bit and be more lenient because it's their grandchild not their child. This special treatment combined with the leathal terrible two stage can pose quite a problem.
My cousin has the same problem. Her mother took care of all four of her kids while she and her husband worked. It's so bad sometimes that they don't want to even go home. They would and put up a fight until they are allowed to spend the night.
The problem? Her mom would make it worse by making her feel guilty saying (in that sorry little voice), "Awwww, just let him/her stay. You have to bring them back in the morning anyway." All the while stroking the hair of whatever child is having the fit.
Now two of the kids are in school full time so it's not so bad, and some gorund rules have been set with the other two. While the occassional fit still happens for the most part they are happy to go home.
I wouldn't send him to another sitter. You are very lucky that your mother-in-law is willing to do this for you. I would just find out just exactly what it is that she does for him and try it at home.
Not sure if any of this helped or not. Hope it all works out soon!