I sympathise! My daughter fights sleep something awful! I have two other kids and never had this problem. I finally decided to see how she acted if she determined her sleep needs. (She wanted to give up naps) If she was crabby and obviously tired, then something would need to be done. In her case, she seems fine, so I gave up worrying about it. It was too much stress for us both.
I know your situation is at night, so that is different. First off, I would stop doing the cry it out. It doesn't work for everyone and if it hasn't worked for her yet, it's not going to. (It worked for only one of mine) You didn't say if she is in a crib, but why not just give her some toys and say, it's time for everyone to go to bed. Don't pressure her to sleep, teach her to be quiet. Quietly play, look at books or puzzles..etc. Keep the lights very low, perhaps play some soft music. It will take a little patience and practice on your part, but she's old enough to learn. I'd continue to do your bedtime routine, don't change your rules or bedtime, just remove the pressure to sleep. She may start falling asleep on her own after playing for a while. Maybe she just needs to wind down by herself or something.
I personally wouldn't worry too much about grandma. She probably lays down with her to force her to sleep, so she can get a break herself! Kids can learn that there can be two sets of "rules" for two different houses.
If you really feel like laying with her is the only thing that works, How about camping out on the floor in her room with a pillow and a blanket. That way you can police her not laying down, and she can see you--but she's still falling asleep on her own. You can then sneak out. I've tried this one too.
Just some ideas of things i've tried with my 3. Maybe one will work for you!