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belfi
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Yahsek
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If the situation impacted your final year of your graduate study. You could mention that and show the proof of your good academics for the the previous years. That will be more convincing for the adcoms. Things happen and they should be aware of that. Besides, it is legitimate and your undergrad grades are the proofs of your accomplishments.
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rjacobs
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Hi belfi, there's kind of a "third way" too - can you incorporate the part about your grandfather into a required essay? Not as a whole essay, maybe, but as part of one of your values essays.

My UG GPA took a nose dive my junior year when I studied abroad. Instead of using the optional essay, I talked in one of my leadership essays about all the good stuff I did and learned abroad. Then, I tied the lessons I learned into examples from my current job. Maybe you can use the same strategy?