Family deed worth it

It is not clear whether the Relinguishment Deed given by your father was REGISTERED or not.  Only REGISTERED relinquishment deed will be legally valid not otherwise.  (I have serious doubt that it would be a registered reqlinquishment deed.  You have to make discreet enquiries with the DDA authorities.)

If it was not a Registered Relinquishment Deed then you have a stronger case to demand your (your father's share) in the property of your grandfather.

Unfortunately, if the Relinquishment Deed given by your father happen to be a Registered one, then your chances of getting any share in the property is very very bleak.

Without knowing the above details, the question of any family settlement simply does not arise.  Yes, your grandmother can definitely change the WILL to deny any portion in the property to you people.

BETTER first try to find out from DDA the exact position about the relinquishment deed. That will hold the KEY to your problem.

Yes, it is registered with the SDM court. 

Can she execute another WILL as we have one will which was already registered as said above?

Family settlement deed will work?

What else can be done to claim our rights?

No. The relinquishment Deed needs to be registered with the Sub-Registrar's office and not with SDM Court.

The Registered WILL can be cancelled and a fresh WILL can be written.

Family settlement deed will also work.

You have to meet with a lawyer in your area and discuss the matter with him/her.