No, don't have anyone as your grandfather's father. Adding another family member in there will compromise the propagation of YDNA to the proper people. Your YDNA will dead-end with your grandfather, as is proper since you don't know who his father was. My grandfather's YDNA would also be a terminating line (if I could get my only male cousin from that line to test, which he won't!).
If you do add someone as "father" make sure it is set as a non-biological relationship to satisfy the requirements for DNA handling.