Before reading the following quote
"If I had to compare her memory and her actions with a child, I believe that she is on the same level as a three year old. My grandmother has dementia. "
I was exactly thinking this as my close relative is suffering from it, he keeps on talking about the incidents 50 - 60 years back in his life.
But the family is exactly like yours giantbear they are taking a good care of him and they (two sons, my uncles) always say that he looked after them when they were babies and now their dad is just a like baby in a bigger body and its their turn to payback a little.
Keep up the good work and don't loose the opportunity to serve and take care of your grandma. Such incidents are the tests of life. God will bless you big for it:))