When one feels grimly amused, exactly what kind of emotion is described? It seems to me that grim and amused are mutually contradictory so they do not conjure any consistent image in my mind. Thanks in advance for any explanations.
I see no impediment to the ambivalence of having two contradictory feelings play in one's mind. Perhaps this excerpt from The London Lancet from March 9, 1857 will provide adequate illustration:
A wealthy old bachelor, with only distant relatives, or none at all, and who has secretly made his will in favour of a charitable institution, possesses a private source of grim amusement which, although rather malevolent and bitter, may last him his life time. He chuckles over the disinterested attentions of expectant friends, or ardent protestations of personal attachment from relations in hope of thumping legacies. The only check to his amusement is the thought of his own unavoidable absence at the denouement, and inability to hear the disappointed ones express their virtuous indignation that he should "Die and endow a college or a cat."
The bachelor is amused at the antics of those sure-to-be-disappointed hangers-on expecting legacies, but the grim thought of his own death must attend the amusement.
You're experiencing wryness...
wry - bitterly or disdainfully ironic or amusing
As these dozens of written references to the fine line between laughing and crying attest, it's not at all unusual to be grim/bitter at the same time as being humorous (towards others) or amused (by others, or by the grim situation).