WB, JB, and MG.... Absolutely, my first action when I heard what my mom said was to remind my daughter that we don't believe the same things my mother believes. What grandma tells her is the only thing she's ever known and while Grandma is sincere that doesn't make it true. I illustrated it for her several months ago by supposing a child grew up with a box of crayons in which blue was called "red" and red was called "blue". If that child used that box of crayons their entire childhood and no parent, teacher, trusted friend, or authority figure ever told them otherwise, they simply would not know any better. Their labels for the colors would be backwards. I drew a few more parallels and she got a good enough grasp on it that she commented on it recently and explained it back to us out of the blue. I think she'll be fine with a few more reminders that no loving creator, if one exists, would be offended in any way by her attending a birthday party.
Black Sheep, teaching my children critical thinking and the principles of the scientific method are a very high priority to me. I am a firm believer that such training, early and often, would help suppress the spread of religious disease.