I remember this rhyme, although we did it slightly differently in the 70's. There was a beginning to it (lord knows if I can remember it) but the grandma part went like this:

"...And there was grandma, swinging on the outhouse door
without her nightie, waiting for the garbage man, who was a playboy,
to take her to the playboy club to be a bunny, baby can you ask for more..2 dollars please"