The mummified remains of 15-month-old Declan Hainey were discovered in his filthy cot at a flat in Paisley four years ago.
His mother Kimberley was released from jail after appeal judges said the judge at her trial should have told jurors to disregard the evidence of two forensic experts.
On the first day of the inquiry at Paisley Sheriff Court into the child's death, Ms Hainey's mother, Elizabeth Rodden, 57, branded Kimberley a liar and recalled the last time she saw her grandson.
As she answered questions about the last time she saw her grandson alive, Mrs Rodden stated it should be her 38-year-old daughter on the stand.
Mrs Rodden, the first witness to be called, cried as she said the last time she saw Declan was on his first birthday in April 2009, just under a year before his body was found in March 2010.
She had to pause repeatedly during her testimony and said: "This death of Declan has destroyed us.
"I didn't expect this terrible thing to happen. It's difficult when you're dealing with someone who's good at telling lies to so many people."
Mrs Rodden, of Renfrew, told Sheriff Ruth Anderson her daughter had "ruined her family with her lies and deceit.
"We loved that baby - I can't answer to her ways of thinking."
The inquiry continues.