I hope Cassie's grandmother comes back from her "retreat" normal. I kinda liked her before they messed with her memory and now I don't really see the point of her.
I thought that Diane's grandmother said she had to bring her to the point of death to see how powerful she was. I don't think she actually wanted to kill her, although, she would of course have let her die had her power not been strong enough. She was testing her to see if Cassie's magic could be used in the balance of good v's evil.