The issue is more about what your grandmother was doing at the time of your father's birth, than it is about whether or not your father had Canadian citizenship at the time of your birth. For instance, I was born abroad to two Canadians (this makes me first generation born abroad - I am Canadian by descent). My child was subsequently also born abroad (this makes my child second generation born abroad - not Canadian by descent); however, since my father at the time of my birth abroad was a crown servant, I was able to prove this which led to my child receiving Canadian citizenship under Bill C-24.
I hope this makes sense