I hear ya; it does become a can of worms.
DD#1's MN is my mom's FN. This was chosen because she died 2 days before DD was born. I already liked her name and would have considered it anyway, but we actually had been considering her sister's name (my aunt's name) as a MN because my mom was in treatment for leukemia and my aunt was her stem cell donor. My aunt has no kids and so we thought it would be a way of honoring her, passing on her line, and thanking her for the gift of life she extended to my mom.
Sadly the stem cell transplant worked but the leukemia came back and my mom didn't make it. My aunt, however, is also a hospice nurse and came out to care for my mom in her final days. She found out we were considering her name and she was like, "My name's awful, don't do that to your kid!" LOL. Also by that point we'd decided we'd go with my mom's name due to her prognosis.
FF to now, and now DH wants/feels obligated to give DD#2 a MN from his side--his mom's name. It's okay, I don't hate it, and it's HIS call on what to use (he picked 1st, I picked MN on DD#1) but now I feel kind of boxed in because I feel he's definitely going to use his mom's name for a MN and I need to pick a name that works with it, instead of me picking a FN and him picking a MN to flow, KWIM?
So yeah, it's a can of worms--but in your situation, I don't feel like you have to do two family members from the same side on the same kid. I'd talk to your mom and see about just using maybe your grandma's name or something similar to it. You mentioned Ellen and not liking it, but what about another form of Ellen (like Elanora? Elenore? Elana?) as a MN and picking a FN without any connotations?