that you understand that some damage control has to be done which requires you to approach the whole conversation with the director under a different light - not all about the truth any more.
Imagine what will happen when your manager hears things from his boss later, and how he will feel. You've got to turn this around in your next conversation with the director. Remember you are on probation.
Its a separate topic as to how to handle your manager's incompetency. Take care of the meetinf first for now.