K Mitchell, I'm also very sorry to hear of your wife's diagnosis and wish her a very speedy and complete recovery.
If your cruise is in August, I would imagine that 8 weeks ago, when your wife was diagnosed, you were not yet in the penalty period for the cruise deposit. Did you call Princess at that time and get information about what happens if you should need to cancel? Usually your deposit is refundable until the day before final payment date.
I also hope that you bought cancellation insurance, since this is exactly the circumstance for which it was created to protect you.
I'm impressed that Princess offered to switch your deposit to another sailing. That's the show of compassion you're looking for. Their rules state that you forfeit the deposit if you cancel after final payment date, and it's great that they're willing to bend the rules for you.
Good luck and please keep us posted on how you and your wife are doing.