It seems somewhat unrealistic to have expectations as a grandparent in this day and age, that the mother would not want a major say in the naming of her first born. "It just seems wrong" Why? this name you want does not pertain to her side of the family "Everyone assumed that it would be named after father, grandfather etc". Maybe that's the problem it's not your prerogative as grandparents to assume that the name is a foregone conclusion just because it's been passed down for a few generations. It's her child, of course she wants a choice in what she names it, maybe she doesn't like the family name. This is the sort of post that Mumsnet would make mincemeat of, don't be tempted to wander over there asking for their thoughts.
Congratulations on the birth of your new grandchild whatever his name is.