Afraid to leave my daughter with my mother?

It sounds as if there are some concerns that extend beyond how well she can care for your daughter...I would start by addressing those with her, how she just doesn't seem like herself anymore. It sounds as if something if "off" with her that needs looking into, so that she is able to fully enjoy her life and granddaughter. Absolutely do not leave your daughter with her if you don't feel comfortable with it...there is a reason that you are alarmed, don't ignore it.