Demons and Funerals

There is a well known custom in Jerusalem and other cities in Israel, that the children of the deceased are not allowed to go to the grave during the funeral. I recently read a book about Rav Yehudah ha-Hassid that claimed the origin of this minhag is in a story told in Sefer Hasidim to do with a man's demon children harassing his real wife's children. Unfortunately I don't have the book at home, and have not found any mention of this story online. I have a dim memory the story was called "מעשה ירושלמי". Can anyone help me find this story? Does anyone know another origin for this custom?