Pointing to a photograph, a man said, 'She is the daughter of my grandfather's only son.' How is the girl related to the man?

Grandfather's only son refers to the man's own father (since if the grandfather had only one son, that son must be the speaker's father). Therefore, the daughter of the man's father is the man's sister. Blood relation problems are best solved by breaking them into short segments and identifying the immediate family relationship at each step. The key phrase here is 'only son', which eliminates the possibility of uncles and makes the identification of the father straightforward.