Hi Q.
I'm not a parent, but I have been witness to many abusive situations. That's what you have there.
You say that you want to maintain somewhat good relations with your son and his family...so, really, to do that you can't be seen as the catalyst to the situation (i.e. the person who 'caused' it all to come out). But at the same time, I agree with the people here who say that your grandson is turning to you for help.
Thoughts:
1. Can your 16 year old call to the other house and freely talk to your grandson? Find out if he's okay and what he wants to do. (The added bonus of this is that kids will usually talk to each other more freely than to an adult.) If he wants to leave and move in with you, then it would be up to you to take steps to facilitate that. The best way would obviously sit down with all members present and discuss it. If you don't think that would happen "nicely" then you involve social services.
2. You could call your local crisis line, or victim's assistance branch of the police (don't know if you have those there) or some similar 'agency' and ask what your options are, what they think is the best way to proceed. This keeps it fairly anonymous and you can get advice without action being taken. (Remember, your grandson may be abused, but this is still his family and he may still be tied strongly to them and the answer for him may not be removing him, but getting the family help.)
3. You could involve the school and say that you suspect abuse. They are then legally bound to follow up on it...which could cause all sorts of waves and various repurcussions you may not expect and your grandson can't handle. It's a fairly definitive action and it could cause a rift in your family quite quickly.
I guess it really depends on how critical you think the situation is from a safety standpoint. Is the abuse enough that he's in immediate physical danger? Is it a situation where your son and his family would be willing to work through it, based on your grandson's needs? Will rocking the boat help your grandson or put him in more danger?
This really is your grandson's call to make and personally, I think your best option is to have your 16 year old talk to him. Find out what's going on and what your options are based on his wishes. Then you can take the appropriate action.
I hope it works out!
Edit: I wanted to clarify some things...(this is what I get for posting on minimum caffiene!)
I know that you posted that your grandson wanted to leave. He sees no other solution to the situation but to get out...and that may be the only solution. My comments about getting the family help are there as an option (I've been a JW though, I doubt it's a reasonable option in the face of JW dogma). When I talk about rocking the boat helping or putting him in more danger, I mean that you need to assess, based on your own experience, what your son and his wife will do if they find out he wants to leave. They may shut down all communications. They may play hardball legally. They may twist the story around when confronted. This really is a tactical situation...and why I said to get your facts straight (his wishes, what your legal and social service options are, etc.) before actually doing anything. You can't play fair...your son and his wife won't.
And one last thought...I agree with the poster who said (I'm paraphrasing) you may have to make a choice between maintaining family relations with your son and his wife and helping your grandson. If there are other grandchildren involved, you may want to remove yourself as the instigator and let it go through the school system...that way if he's 'placed' with you (you can make that generous offer to keep him in the family) you haven't placed the other kids in jeopardy of not being able to reach you if they want.
Okay I think I'm done. If not, I'll be back. :)