My German grandfather had to flee Germany in 1934 as a member of KPD. He died in 1938 in Moscow; a victim of Stalin's Great Terror. His German family was compensated post 1945 for his death which proves his citizenship. However, his son was sent to UK aged 8 for protection in 1934, grew up, was schooled, and was granted nationalisation in 1943 prior to joining the British Army. He went back to Berlin in 1946 where he married my German mother. I was born in 1950 and therefore a British child of a British National. However, my contention is that if my grandfather had not been politically repressed and required to leave Germany to survive, and his wife with 5 children had to send two children abroad for their survival, I would still have German citizenship. I am requesting reinstatement through Article 116(2) for restitution of my birthright. Am I correct in this logic?
I don't think that un-revoking your grandfather's German citizenship would help you, since your father naturalized to obtain British citizenship before your birth, and German citizenship is automatically lost upon voluntary acquisition of a foreign nationality, so even if your grandfather's German citizenship had not been revoked, the German citizenship your grandfather passed onto your father would have been lost before your birth.
There might be another route to get German citizenship through your mother, if she was a German citizen at the time of your birth. Since you were born before 1975, and thus could not get German citizenship from your mother at birth, you qualify for a special naturalization process if your mother was a German citizen at the time of your birth, and you are fluent in German and have other ties to Germany; you do not need to renounce your existing nationalities to get German citizenship through this process. See this and this (both in German).
However, there are complications with that since I believe German women generally automatically lost German citizenship if they married a foreigner before 1953, so she may not have had German citizenship when you were born since she married your father before your birth.