I guess I'm suggesting that you develop boundaries to insulate you and your family from her...

From your first post I kind of get the impression that she has a tendancy to interject her opinion of various things into your life...if you (and more specifically your husband) are not firm about your family's boundaries and assert them they very well may get trampled on...which sounds like it is happening now...who cares that she finds fault with how your husband plays with them or gives them a time out

Your words quoted are words I would probably use myself..."I think I am very respectful to her and I don't push anything on her". If you don't push (I would insert the word "assert"), then you will end up feeling trampled. You may want to work with your husband regarding assertiveness. In this case, the boundaries for your family would ideally be developed by both of you but be spoken from your husband to kid's mom.