coach225,
assuming it was manufactured by springfield and not rock island the serial number places it as a 1906 manufacture date and had the barrel replaced with another springfield made barrel that was made in may of 1909. this is a very low serial springfield and could be worth quite a bit if it is not a forgery such as the one described in this thread. looking underneath the bolt handle you should be able to make out a single letter stamped on it. S for springfield, R for remington, I don't recall the stamps for rock island or smith corona bolts. if it was indeed your grandfathers rifle then it probably has a mid 30s-early 40s remington bolt. if it is all springfield then that increases the value more. I would advise you to look at all of the pictures in this thread and compare the markings and fonts to your grandfathers rifle and see if it is correct. a few other things to look at is has it been sporterized and has it been converted to another caliber? a lot of people chop the stocks down to a certain length to lighten them, ramp the magazine followers, drill and tap the receiver for scope bases and a popular caliber conversion is 300 win mag. I recently got a little upset when I walked into a LGS and found a low serial M1917 with all of the above mentioned modifications.
if your grandfathers gun has not had any of those modifications then you have a priceless family heirloom that should be cherished for generations.