Anima, you may not believe this, but that was one of the more benevolent parental reactions that have been posted on Susan's.
The process of educating loved ones about Transgender can be long and painful, but it's often worth it in the end. It doesn't sound like she's hostile, just uninformed. Keep explaining what Transgender is all about - when she finally gets it, it will be worth it.
In the meantime, please accept a hug and a wish for good luck from me.