Yes, sometimes telling the truth ISN'T the right way to go.
You've told her once, you saw the reaction, I doubt very much you'll want to go THERE again !!
We had a lovely little lady who passed away a few months ago. Her husband had passed away a few months before that. She was told ... once ... and she said "yes, he was very ill, he's ok now" but for herself, she started slipping away to the point of asking us to help her die (now THAT'S hard) she finally had a horrendous fall and passed away within the week.
She got her wish.
The cold hard truth is most dementia people die a slow and miserable death. Whatever we can do to make them smile makes it that little bit easier.