Oh for cripes sake ... Obama mispoke. He's said multiple times in public speeches and his books it was his grandfather Stanley who served in WW 2. No big secret.
Why is the video cut off from his next sentence? Could it be he corrects to say "grandfather?
Good lord. This is ODS at the max.
Here is the entire 7-minute speech, given in 2008 to the 25th annual NALEO conference, uncut:
http://www.youtube.com/watch?v=0i173nXE1hc
He starts talking about latinos and the military at about 6:20 in. But strangely, the entire speech is here, walk on to walk off, and Obama is wearing the very same clothes, but he never utters the phrases on the videotape you linked.
He must have given a second speech the same day? Same place?
Found it: he took questions afterwards. Yeah ... pretty clear he just mispoke, rather than trying to deliberately lie to the crowd (it's about 2/3 of the way in)
http://www.youtube.com/watch?v=hDyTDWPmQFY