Ouch, tough one. I am in a similar situation where my husband's sister and her soon-to-be husband know, but no one else in the family yet does. (One of the 'perks' of transitioning in a foreign country I guess. The next time that part of the family will see me could be at my sister in law's wedding. She requested that we tell everyone before hand so that the gathering wouldn't be weird. Personally, I agree wholeheartedly and told her not to worry. It's her celebration, not my coming out party. I have a rule about not giving big news at any huge family gatherings since most of them (at least in my family) tend to be parties celebrating something. Holidays and celebrations are, in my mind, a terrible time to drop something like transition or coming out, especially if it is supposed to be a celebration for someone else. Couple that with most family gatherings tend to have some tension; it takes a lot of work to organize an event like that.
That being said, only you really know your family. I would talk to your parents and ask them if it really is appropriate to do so, since it an engagement party for someone else. Maybe suggest telling everyone after the event?