Howdy
You have a 1st Model K-22, not a 2nd Model. (Generations are for Colts). First Model Serial Numbers ran from 632124 to about 682419 and were produced from 1931 until 1940. Second Model SNs ran from 682404 - 696952, only manufactured 1940 to 1941.
First Models had the 'pre-micro click' rear sight and old long action, 2nd Models came with the larger micrometer click rear sight and the short action. 2nd Models had a large S&W trademark on the side plate, 1st Models had a small S&W trademark on the left side of the frame.
I have K-22 SN 6444XX. It shipped in January of 1932. Yes, the grips are incorrect.
This First Model K-22 does not belong to me, I wish it did. It has the correct grips. It also has a trigger shoe and a grip adapter.
I know of a K-22 in a store near here that is priced at $1500. It does not have the correct grips on it and as far as I know it is still in the showcase. Putting correct grips on an old gun is always nice, but it usually will not enhance the collector's value unless the grips are original and numbered to the gun.
I believe the dot on the front sight you are talking about is silver, not stainless. It was called a Call front sight (from S&W employee Charles Call) and they came with either a gold inlay or a silver inlay.