It's in Grandma's character profile to spin yarns and stretch the truth. This is a little wicked pleasure she indulges in whenever possible, partly to test people's gullibility and reaction to her fibbing, partly to gain a feeling of power over a sticky situation.

In this particular case, Grandma wants to sensationalize a story around a person to embellish its interest and to turn 'a local boy' into some kind of folk hero; perhaps she also wants to undermine the reporters' credibility by furnishing them 'information' that isn't the truth. It's her way to pay them back for what she would call 'snooping around' in people's personal lives just to get a scoop.