OP,
I too am from MD and just went through a GPV case in which my MIL withdrew her complaint one week before trial. I understand the anger you feel because my wife and I experienced it first hand. In some states being a widow would definitely work against you but I'm not so sure that's the case here in MD. I do think your chance of getting the case dismissed at the outset is slim but not impossible. The senior members of this forum are very helpful and know much more than I do about GPV but let me see if I can clarify some things.
As far as mediation goes, we were never required to do so. The opposing attorney wrote to us and asked if we would consider it and we refused. IMO there is no need for fit parents or parent to mediate over whether a GP should have visitation. Maybe if the case had gone to trial the master/judge would have ordered it but more likely I think the court would have awarded us a victory based on the merits.
One case that is relevant to yours is Aumiller vs. Aumiller. Google it and you should be able to find it. Mom and Dad were married, had a kid, got divorced, then Dad died of a drug overdose. Dad's parents sued for GPV. The case went to one of the appellate courts in MD and the mother won. The important thing for you to know that came out of this case is that the court said the breaking of a prior relationship between children and GP's is NOT in and of itself an exceptional circumstance. Don't let the GP's attorney try to pull that one over your attorney or the judge. Aumiller was very clear about that.
Another important case is Brandenburg vs. Labarre, which the court of special appeals ruled on this past June. The GP's were extremely involved in the upbringing of the children, provided full time day care and also had frequent overnight visits with them. The circuit court judge gave visitation to the GP's but the parents appealed and won. The court of special appeals said the GP's never provided any evidence of harm to the children absent visitation. You can also find the details of that one online as well.
The bottom line here in MD is this: your in-laws, in order to get visitation, will first have to do one of these two things BEFORE the court looks at the "best interest of the children" standard - prove that you are unfit, which you're obviously not. Or, prove that exceptional circumstances exist. Now, this is where some confusion lies since the MD courts have not given a "bright line" definition of what constitutes exceptional circumstances. I hope other posters read this very carefully as well because this may be different in other states. The GP's must PROVE that your children are being harmed by an absence of visitation with them, a difficult hurdle indeed. You do NOT have to prove that the children would be harmed by seeing them. There is a huge difference. The burden is entirely on them. If all they can say to a judge is "we had a prior relationship with them, a good one, so it's common sense they're being harmed" then the GP's are going to lose. They must provide solid, concrete evidence that the kids are currently being harmed, not just mere specualtion. A prior relationship alone, even a close one, will not cut it in this state anymore. If you show that your kids are well adjusted and healthy then it will be very hard for the GP's to rebut that. Now, what could make things more difficult for you would be the judge. The one judge we encountered at our motion to dismiss hearing was ignorant and even more arrogant. Never a good combination. However, if you did lose at the circuit level I would definitely encourage you to appeal, as the appellate courts have steadily ruled for the parents in GPV cases since the Koshko vs. Haining decision in 2007.
Please feel free to PM me. I would be more than happy to give you the details of our case and assist in any way I can.