My grandmother grew up in Germany, born in 1939. I realized a few years ago that her mother's maiden name is Jewish and our facial features are distinctly Jewish. Weird thing is, I asked one time during Christmas in front of my whole family and my question was met with total silence. Her mother (my great grandmother) married a Catholic, who was also in the German army during World War 2. How did my grandmother's family escape the Holocaust? I assume it's because my great-grandmother married a non-Jew but I would like to put this answer TO REST.
What is your great-grandmother's last name? If you know that, you might be able to use the Jewish genealogy sites, which are quite useful for this. Do you know if she (your great-grandmother) had brothers and sisters? If she did, knowing their history might help.
It is fully possible that they managed to fake up paperwork for your great-grandmother, but the fact that she was married to a Catholic alone would NOT have saved her. Jews married to non-Jews, if they had even one Jewish great-grandparent, were classified as Jews by the Nazis.