I'm so sorry you had to endure that. How frightening and painful when someone you love gets in your face like that and is so hateful! Although I can't really know, I think part of his anger may be directed at himself because of the situation he is in (adult, wife, children, no job, living with Mom).
I believe that my stepson's evil treatment of others appeared to be a combination of the drugs, alcohol, and feeling really lousy about himself. I felt bad for him because I care about him, but I don't have to be on the receiving end of his rage. I didn't, and don't, deserve it.
Perhaps letting your son and his family go will be the best thing you can do for them in the long run. They will learn to be self-sufficient and be very proud for having achieved that! Don't let his threats of never seeing your grandchildren frighten you too much. IMHO, it's just a manipulative tactic.
I hope today dawns a little brighter and that you've been able to get some rest!