I feel two ways about it...
I think the worst thing you can do is the wimpy passive/aggressive,"Honey have you asked the pediatrician?" type lines.
This is your grandson. He is being put at risk. Not only does bottle feeding cereal mean he is taking more than he needs - see the AAP's "Caring for Your Baby and Young Child: Birth to Age 5" link here: http://www.amazon.com/Caring-Your-Baby-Young-Child/dp/055...
...he's damaging his thyroid and the mechanism in his brain that controls hunger and tells him when to stop, thus taking more than needs, and making him obese. Additionally, it is a choking hazard. As my pediatrician explained when my husband wanted to start our infant on cereal, an infant's esophogus is about as big as a bic pen, the actual hole likened to the tip. Thus, choking is a real and serious risk. Also, as I'm sure you know (from the way you mentioned it), introducing all foods at the same time is a bad idea as #1 you won't know if he's having an allergic reaction which food is causing it, #2 he'll refuse anything but sweet (yellow vegetables, fruit cereal) if they're introduced first, #3 if he IS allergic to a food he's getting so much that it could potentially be a major reaction requiring medication and medical attention. Finally, obese babies grow into obese children - because their bodies get screwed up and if a parent doesn't have the knowledge or care enough about their kids to get the appropriate nutritional knowledge when their kids are babies, they more than likely won't as they grow into children, teenagers, etc, thus perpetuating the problem. Don't get me wrong, I love fat babies and I'm not advocating denying your grandson what he needs - I just hope you can get them to feed him more appropriately and healthfully.
As a mother, I hate it when my mom tries to tell me what to do, when she's passive aggressive about it, or even worse, if my mother in law were to try to tell me what to do.
But this is a medical issue and in their arrogance and ignorance are putting your grandson's health at risk. As you are obviously a mother with superior knowledge, I feel like it is your duty to give them the facts point blank and to do it asap. I recommend purchasing the AAP book I mentioned (you can get it on Amazon for $0.12)or getting it from the library, arming yourself with specifics, with the source material marked, and having a firm discussion with your child - be it the mother or the son of your grandson. They will tend to be more receptive...and if not, try the other one or both together.
But yeah....it's kinda something you can only say once and try to open with positive remarks on their parenting and above all else - be kind. Grandmothers can be overbearing sometimes....but also, sometimes if it's a health issue, it's called for. I guess, have the facts, be kind but firm, tread lightly, and once they have the facts, if they choose to ignore them and continue to put your grandson at risk, that's their choice as (potentially bad) parents and there is nothing you can do about it.
Obviously I feel very strongly about this. I sincerely hope I haven't offended you in any way. Good luck!