Dear Father-of-7,
When I read this thread a few ideas came to my mind, and I wanted to share them with you.
First, I agree with Incogneato - it is possible that the mother was afraid of the legal responsibility if your son were to have any medical emergency while he was under your watch.
I am guessing (perhaps wrong?) that although your son and her son are friends for many years, his mother and you aren't very close yourself, like family friends. If you were, I would imagine she would not feel the same way, perhaps.
On the long run, I am wondering if perhaps it would be possible to establish long term friendship with your son's friend's family, so that eventually you can get help from their parents for these kind of issues.
I am also wondering if there might be some support group where you can find other parents of diabetic children, and by becoming friends, you might get your son to meet new friends who can understand what he is going through and meet parents who understand what you are going through. Just a thought.
On a different note, I was wondering if you could perhaps organize some sort of a "camping sleep over party" for your son and his friend. You could set up the tent in the garden (if you have a large backyard, I don't know if it is feasible), buy some neat things like green light sticks and flashlights and get all his friends to show up and spend the night together in the tent. You could then make sure to attend your son's needs with blood sugar control (being right next door) and your son would feel more in private. (plus, it is way cool for a kid!).
Wishing you the best of luck,
Nicolas
Family Life Educator
