Well, as far as the kids' behavior...assuming that they are all under 11, I don't necessarily think that they acted out of the ordinary for kids that age. Especially ones that have been told someone is coming over with presents/toys. And while I do think that 11 is old enough to learn how to refrain, if she doesn't have much and is being raised by someone that isn't all there, I don't think her behavior is all that surprising.
If Ruth knows that you would have not come over if the kids were there and deliberately decided not to tell you, then yes, she was rude. But, if this is something that she thought wouldn't make a difference (and for me, it wouldn't), then I don't think she was rude not to say anything. You were bringing the toys for the kids and she may have thought you would like to give them the gifts themselves.
I do think, though, that since the toys were not intended for her own grandchildren, she should have taken some effort to make sure that her grandkids did not take any. Depending on their ages, I'd either have you present the toys when the grandkids weren't around, or if they were old enough explain that the toys are for the neighbors and they can be excited on their behalf.