Mine were always Nanny and Grandad (shortened to Nan as I got older....) and Katie does the same (expect for MIL who insists on Granmama!! mad old bat!)

Fully understand how you feel - can you not sit down with Josh's Mum and explain the problem?

At the end of the day its not the name you use that makes you a grandparent but I do hope you get this resolved. It may be that baby decides for himself with his first attempts at talking (my Grandad was known as Nannack for years!)