The way a catheter stays in place is that there is a bulb that is filled with 10 -15 ml of steril water that blow the bulb up like a small balloon. The water must be removed, the balloon goes down and the catheter slips out simply. I have had a Folley in place for the past 2 years for 24/7. Several months ago, the tubing got caught and out came the Folley balloon and all. I certainly let out a yelp when it happened, it was very painful. But that was it, I went to the ER to have it replaced, and it has been in ever since. Your Grandmother, I am sure experienced pain when it happened, but that should pretty much be it. Everything should be back to normal. Knocking out the nurse might make you feel better, but I don't think it will do anything to make your Grandmother any better.
The above comment is correct about removing a catheter. The ballon is filled with 7-10 mls of normal saline, when it is removed a steril empty 10ml syringe is used to deflate the ballon and the catheter is removed. Usually there is no pain, however if there is any issues with the bladder or urethra it can be painful to an extent. Also, if an infection is present that can cause irritation and continued problems after the cath is out. Some people report the feeling of "razor blades" with urination when an infection is present. Also, there is the risk of allergy to the latex in the catheter. I would have her visit the doctor for a UA C & S. Explain her symptoms and let them treat her accordingly.
PS I am a nurse on a uro/onc gyn surgical floor and I take out foley's everyday, they SHOULDN'T hurt by design...but that is not to say that the nurse did something wrong..it happens, and I know nurses that may have rough bedside manner..