Stew,
In short, it is possible for you to be Siamerican, officially, someday soon. However, I'm not sure your dream of entering Thailand for the first time on a Thai passport is feasible, though it's hard to say without knowing all the details of your case.
From your inquiry, I would presume that your mother refers to your Thai grandfather's daughter.
If she has Thai nationality already, particularly a Thai passport, then it makes matters a whole lot easier as it would allow her to do a belated birth registration for you via the Royal Thai Embassy in DC, or select Consulates (i.e. Chicago / LA), ultimately entitling you a temporary Thai passport to enter Thailand--similarly as in the case mentioned above--so that you can swiftly get permanent docs, i.e. house registration, ID, and passport .
In the event that she isn't officially Thai, and/or not able/willing to represent you in the states (via embassy to file your birth with the Ministry of Foreign Affairs), then your options are narrowed down to dealing directly with the Thai system in Thailand, initially on on your American passport, similar to me.
In which case, you would have to make ties with your surviving Thai relatives prior to presenting your case to the Royal Thai Police (Proving Nationality Division of RTP Immigration Bureau). Your grandfather is a start, though I'm not certain the required DNA test is an option. I did it with my mother's younger sister (my Thai mom's been deceased for over 13 years now) Anyway, that comes later down the road, after you've gotten all the paper work in line / legalized, i.e. every document that ties you as a child of a Thai citizen.
It sounds like a slog, either way--the question that will determine your next step is your mom's national status?
Regards,
Jao Moragoat
P.S. See this latest thread on Thaivisa Forum with lots of relevant information.