That's a tough situation, and one that sometimes crops up when folks get older.
It makes zero sense for you to be asked to return it- so take all the bills from when you paid to have it maintained and fixed, which have got to now be more than the mower is even worth, and present them to him for payment. That may get him thinking about this whole subject just a little more clearly. At least it would get the money flowing in the right direction.
Do you have any proof, or a witness to show that your grandmother gave you the mower? Legally if it was their marital property, she had the right to do that, and you could certainly make the reasonable arguments you made here about having done all the mowing, and in addition, the repairs to what was by then to have been your mower.
I would find it hard to believe your grandfather would paythe $200 court fee to get it back, and if he did, he would likely lose- or be expected to pay the reasonable maintenance and repairs on the machine that was *his* during the time you paid for them. And then, he would have to find someone else to mow his lawn.
Sometimes older guys get into unnecessary pissing contests, and it has a lot to do with their frustration with their failing condition. I know someone who entered into a border war over 6 feet of property that lasted until they both died. THis is awkward, and perhaps a conversation overthe kitchen table about what his options would be might settle it.
You've more than earned the ownership of the machine, and it would be hard to imagine a judge wouldn't award it to you. At minimum, he's have to pay for repairs, so find all the bills from over the years, and show him how much he would owe you.