What shall I do?

I would do it, lovely opportunity to bond with your DGD. And the odd morning you can't do it because you are ill or away, your DIL can do it. Simple!

Breakfast club for my DGD is from 8.15 so other granny gives DGD breakfast and takes her to school (not every morning). We don't live near enough but we would take turns if we were.
DDIL cannot be late for work (school).

Can she do flexitime in her job?

Give it a go, you’ll feel mean if you don’t. She may say, No Thanks, but at least you’ll have made the gesture.

Isn’t her breakfast club from 7.30? Wouldn’t that solve the problem? We take DGS to and collect from school. Really not a problem, second nature now. In fact I see him across the road then he wants to make his own way, all of 20 yards. Re the slobbing about in PJs, still possible, cold and darkish at the mo, fling a coat on and nobody will notice. I don’t think it has to be a millstone around your neck, definitely Brownie points with DiL!

I am obviously not as kind as you, I would not like the commitment which could go on for years. I would not like having to plan holidays, appointments and days out around school termtime. I would also worry about being unwell and still have to take her to school.

Well of course you will.
We all do what we can to help our family.
I think I know enough about you to say this.
Just think how much you will enjoy helping and spending time with your GD.
Is this likely to be for several years or is your GD likely to be doing it herself before too long?
How will school holidays affect you.?
What did your DiL do at this time?
Good luck with your decision.

No contest .....of course it’s a great idea why not