Someone asked a question about lying to a parent about the death the parent's parent. My personal experience in caring for my mother was to tell her whatever would make her happy within reason. The was dying from Dementia and I never told her. I did tell her that her parents were no longer living because if I didn't, she would want to call my grandmother.
Most important was the fact that Mom was pretty sure she was in high school, so my telling her that S or B were dead would have meant to her that two teenagers must have died tragically rather than two 90-year-olds who had died naturally. She didn't remember them as old people -- they (and she) were forever young.
It's very, very important to try to gauge in what time frame your LO thinks they're in. The fact that I was Mom's daughter was lost on her, because in her mind I was a familiar face and name but she wasn't old enough to have a 60-year-old daughter. She was just crowned the prom queen, for heaven's sake! :-)
A couple of weeks ago she was watching a re-run of BONAZA and told me how Michael Landon was best friends with her brother and had been over to his place 'on the coast' (SF) LAST WEEK and had been swimming and having a great time.
Speechless for a minute, then I said "Mom, Michael Landon died 30 years ago!" She argued that, no, he'd been at Uncle Dick's the week before. I said "Mom, Uncle Dick died 3 years ago". She would not believe me.
Thank goodness for Google--which confirmed that Michael Landon had in fact died in 1991 and Uncle Dick had died 3 years ago.
She was upset and sat there like a deflated balloon. I'm not going to try to keep her updated anymore on sad stuff like this. She won't remember anyway and she gets mad at the bearer of bad news.
In our family we placed a large photo of my MIL and her deceased husband in her room at the facility. Under the photo we have her spouse's birth and death dates large enough for her to read from bed. This seems to have minimized her asking, but not ended it completely.
I think you did what worked best in your situation and that's all one can do. If she couldn't retain the info she would have just kept asking.
You can always make "excuses" why "mom, grandma, dad" or anyone else can not be called.
They are at the store, they are at the doctors, or any other excuse you can come up with. The important thing then is to REDIRECT the conversation.
Go from "mom is at the store, do you want some tea and a cookie?" or "dad took the car to the shop for service, do you want to go watch TV? There is a great movie on"
Redirection will get the mind off the sad event and onto something more current or pleasurable.