If you have a good relationship with your grandma, you should just do what I have done with both of my grandparents.  

Just ask them if you can restore it for her.  My grandpas were both very happy to have me rebuild their tractors.  They paid for the restoration (while I was in high school) and although they were still the true owners I still got to take them to the fair and show them at engine shows.

It's also very likely that the tractor would someday be passed down to you anyway since you did the restoration.

Anyway, just a thought.