Final answer:
The grandmother is upset because Frank threw up his Communion wafer, a sacred object, into her backyard.
Step-by-step explanation:
The narrator's grandmother frets that she has "God in me backyard" because of Option 3: Frank threw up his Communion wafer in her backyard. The Communion wafer in the Christian faith is considered to be a sacred item, representing the body of Christ, and thus it is treated with utmost respect and seriousness. As a result, the idea of it being vomited into the grandmother's backyard would be distressing, as it can be seen as a desecration of something holy, which might be perceived as invoking God's presence in a way that is far from ideal.