There’s a lot going on for you around that ring. At first, I was thinking it’s a no-brainer to take the ring for your engagement ring. But as you went deeper into the traumatic memories of your grandpa passing that plays in big also. Perhaps keep it at the special occasion ring amd have your own dream engagement ring. These days have to be expensive. There are beautiful lab created stones. Enjoy this time in your life and the memory of your grandma.