I'm in the "don't piss off the already unstable person" camp because it might make it worse. People this clueless can have a mean, vindictive streak to them and it can get ugly.

I certainly would go ahead and talk to the grandkids though - kids are often smarter than the grown-ups and they'll learn not to be in your yard. I can remember when we had a couple of boys in the neighborhood who thought that it was ok to climb in a tree of mine until I came outside and told them to stop. If that doesn't work, try some plants with stickers or thorns.

If that doesn't work, just stay up late, drink on your back porch, and yell STFU!