You have the answer to your question under your nose. What your daughter said to you about not seeing your grandchildren because you can't help is selfish and immature.
Invite her to live near you, make it clear that she must find her own place because of your health issues and make it clear that she is the mom for the kids, not you. Sounds like she needs to grow up fast. It didn't work before, it won't work now. I wouldn't put my health on hold for her problems that she herself created. Make it very clear that she will have to get a job to support herself and her kids.
If you can spare the money, offer to pay first month's rent on a place and then she's in charge.
I think it's called tough love. The dividends are great in the end though. Good luck.