There are some people that just can't deal with certain personalitys... Or ages... Or sexes...
I would talk to her about it and ask her what the screaming was about... It could be nothing... Perhaps she was demonstrating to her how loud SHE was... Perhaps she was loosing her cool and needed a time out herself. You won't know until you talk to her. Perhaps telling her (if she was loosing her cool) how YOU would usually handle what ever situation it was... Or when you start to lose your cool that you leave the room etc...
You even say in your about me section that she is "challenging"... Is your MIL oldschool about kids are seen and not heard? Do as I say kind of thing?... Does your daughters personality fit in with that?
I would say that your daughters reaction probibly had nothing to do with a couple of weeks ago... It would have come out sooner...
I have 3 kids and at times (tired, sick, hungry, grumpy etc) they can have the same over reaction to repremand. Maybe she always does that with grandma because she's figured out grandmas weakness for the hiccup cry, or maybe YOUR weakness for it... And really if they arn't disciplined very often by someone then when that person does repremand them, the reaction tends to be bigger...
Ask hubby if he remembers his mom yelling at him or any siblings... Talk to the MIL about it... And if she says she can only handle one at a time don't force her to take both.
We have 3 kids and they LOVE their one on one time with grandma and grandpa... Just make sure that there is a rotation and it does not skip...