Sorry to hear that fella. I've been a funeral director for the last 10 years and I'll tell you what I tell everyone. You know your kids and you know your family. A funeral is a celebration of someones life and your kids are a part of that family. If you want them to be there then take them. Do not worry about what the done thing is.
The only time I would advise against taking children is if they are at an age where the funeral would might be stressful for them, but again you know your kids and how they are dealing with things at the moment. I personally think it helps kids to get an understanding of whats going on. Tell them your going to have a service to celebrate your Gran's life and that she would have wanted them there. Again its a judgement call thats yours. Personally I wouldn't miss an oppurtunity to let them spend time with your family.
Both of my Kids went to 2 of my Grand parents funerals over the last couple of years when their age's ranged from 3 months to 2 years. They Promptly put smiles on everyones faces during the service (Even the Minister burst out laughing during one of the hymns when our Daughter started dancing to the music).
This behaviour might not suit everyone especially the higher faiths among us but again… you know your family.
I'm not religeous in the sligtest but it always brings a smile to my face when my daughter gets a ballon and then promtly lets it go before proclaming she's given it to the Gran to play with in the sky!!
Hope all goes well for you dude