Gondo's Grandfather is one of the past proprietors of the Bazaar's Scrap Shop and grandfather of Gondo. He is also one of the previous owners of the Ancient Robot LD-301S Scrapper which was eventually inherited by his grandson. During the time he ran the Scrap Shop he used Scrapper to collect materials from The Surface until it broke down due to age.
He is implied to be deceased by the events of Skyward Sword, however he left behind notes on various Materials the Scrap Shop uses to upgrade equipment and items. Interestingly, his notes contain information about The Surface and his notes on Dusk Relics even make reference to the Silent Realm, which is referred to as a world of spirit.
He is also the one who told Gondo that the extract from Ancient Flower acts as oil for robots like Scrapper, indicating he was alive at some point during Gondo's youth.
Given his knowledge of the Surface and the Silent Realm contained in his notes, it is possible that Gondo's grandfather may have lived during the lifetime of the Goddess Hylia and around the time of Skyloft's creation. This would explain his knowledge of the Surface and materials found their as well as his knowledge of the Silent Realm. It would also explain how his family came into the Ancient Robot, LD-3015 Scrapper which he used to gather scrap and materials from the Surface before it became inoperable due to age. Of course, it is possible that he was born on Skyloft shortly after it was founded and the information was pasted on to him from those who had lived on The Surface during the Goddess's lifetime. Alternatively, his knowledge of the Surface may have come from Scrapper.