It may be a conversion issue. I converted to Conservative Judaism, and the Orthodox guys who run the joint probably wouldn’t consider me Jewish. ;j
If they didn’t consider the Mother to be a “real” Jew, they wouldn’t believe the daughter to be, either.
Quite reasonable. The law of return defines Judaism through the mother. See here
Which means that if it was your grandmother from your mother’s side, according to the Jewish laws you are a Jew, and may immigrate to Israel. Welcome Brother!