It saddens me to hear about her mother. These poor children don't get to choose there parents. It sounds to me like your granddaughter might have some emotional issues about her mother.
She might be doing this for the attention because she doesn't get attention from her home life (her mother or father).
When she hides these things she knows that eventually you'll be looking for them and asking for her help in finding them. She gets a satisfaction in helping you look for them because she is getting attention from you at the same time. It's a comfort thing w/ her.
That little girl needs alot of love. If she hides things - instead of asking her if she hid them, just go along w/ it and tell her that if she can find it she'll get a piece of candy and a huge hug for finding them. Maybe you both could play some kind of hiding game together. Hide things around the house together and then go find them or have her hide something and make you go find it and vice versa.
She's going through alot right now - be patient w/ her and just love her & hug her as much as you can.
How frustrating!!
What would happen if you didn't search? Once you see that half smile on her face, what would happen if you just quit searching for the item and said "oh well, it will turn up eventually", and then busied yourself doing something else?
I have a nephew, who has had a very rocky beginning, and was adopted as a preschooler, who would hide from his mom in the house. He's EXTREMELY good at hiding, and it would take her up to an hour to find him - because he'd dart to a new hiding place she hadn't searched. She finally just stopped searching - she'd call out "Nick, I'm done with this game, come out when you're ready!!" and it often took him an hour or so to come out. But he finally quit it.
Maybe you could actually have a fun game in the house where she hid some item - as a game - and you find it. Then you hide it, and she finds it.