Just jumping in, to point out that there is a certain personality type, that can be perfectly competent and smart but still have NO CONCEPT of what things cost. My dad, a former attorney and commercial banker, is like this. He will often promise to pay for things for us, and then afterwards have huge "sticker shock". Now we always make him give us a budget, up front.
I agree that FIL and MIL have both put OP in their financial business, but I think OP would be wise to try to get out of that position. I also agree with PP's who said that, if they or their mothers found out they were enabling the dad to spring a huge expense on them, the mom would be furious at the kids. People can get all abstract and theoretical about what is or is not your business, but you know these people, and your gut is telling you that FIL is asking you to help him screw up. Trust your gut.
In your position, I would
1) refuse to help plan anything unless I was given a hard-figure budget to plan by. FIL states the number, then you adjust the menu, venue, and guest list accordingly.
2) If the budget number gave me pause about their finances, or I thought it would upset MIL, I would refuse to help or attend unless FIL spoke to MIL about it. He can talk about wanting to plan a surprise, without telling what the surprise is.
3) If you are not willing to do 1 or 2, I think giving the cash gift to "cover your plate" is a decent compromise.