@turkay1-- I'm very sorry to hear about your Grandma. I'm afraid I can't completely answer your questions as I'm not an expert on the subject.
I do know however that this condition is very common with alcoholism. It has been shown that excessive and long term use of alcohol leads to thiamine deficiency and eventually the degeneration and shrinkage of the mamillary bodies.
I think that there are some cases where this degeneration can be temporary, with dietary based thiamine deficiency perhaps. Supplementation might help to some degree but if the damage advanced, the memory loss will be permanent.
When you speak to the doctor, make sure to ask the exact stage in which the disorder is at currently. That is, how far has the degeneration gone in the mammillary bodies and what can be done at this point. Best of luck.