It sounds like a family cycle, a cycle of growing up in a certain kind of dysfunction and then choosing a certain kind of dysfunction in your mates. Look into your history. What kind of man was your grandfather; what kind of home did your mother grow up in? What kind of man was your father; what was the dynamic between him and your mother, and what kind of home environment did they provide? What kind of man did you choose? What kind of environment are you providing for your children?
If she's only recently bitter and unpleasant, then it's possible that her husband was a buffer for her. In the absence of a man to help her with...life...maybe her vulnerabilities are exposed now more than ever and she doesn't know how to manage what she has never had to manage on her own.
Here's what I think: Your mother is caught in the middle, sandwiched between two generations that need her help. Her unresolved issues with her mother are showing up. She is resentful that she must care for her mother when she feels that her mother has failed her somehow. When she looks at you--her adult daughter who can't seem to make healthy decisions for her own life--she is faced with the awareness that she might not have given you all the tools necessary to be a fully-functioning healthy adult, and that stings because it puts some responsibility on her. She might think that she was able to pull herself up and make something of her own life and you should be able to do the same. At this point, she doesn't know if she should show you tough love or gently try to re-raise you. In the meantime, she's spent.
I think that your best bet here would be to get yourself some therapy to resolve your own issues. Help your children to be aware of the sickness in your family so that they can work on themselves and avoid continuing the cycle. Try not to look at your mother as your mother. Try to imagine her as a woman who grew up as a little girl with this other woman (your grandmother) as HER mother. At whatever age or time in her life, she met the man who would be your father. Some time after, she became pregnant (with or without being married) and was faced with bringing her background in to tend to this new life. Now, think about who she is and what tools she had, and factor that into what she was able to teach you and what that experience might have been like for her.
Anyway, I think that if you can start thinking of her in those terms--a woman, instead of a mother to meet your needs--then you might be able to put some distance between who she is and who you need her to be. You might be able to have more compassion for her and for yourself. We don't always know growing up who our parents are, and we wonder how we come to make some of the decisions that we make. There's a reason that children identify so deeply with their parents. To an extent, we ARE our parents. We can't develop our own identities until we, first, understand what connects us and, second, figure out where we fit in there. There is a fine line between being your own person and being given a chance to improve on the history that you've been handed. You ARE a younger version of your ancestors. What sets you apart and makes you an individual is how you manage what you've been given through your blood.
Good luck to you.