I like your lap quilt idea best. It maintains the "integrity" of the quilt. If they aren't too large, maybe you could rescue a couple of the butterflies that haven't been eaten and make Christmas ornaments for his grandaughters? Just puttin' in my two cents.....for all it's worth. :oops:
The suggestions about making two quilts for his grandaughters by using the original blocks and alternating them with vintage-looking blocks is great, too.
Please keep us posted as to what you decide, and we certainly expect to see the end result! :thumbup: