T.S.
What need are you trying to meet? Are you trying to fill a 'grandfather' role for your children? What type of person do you want to fill this place?
It sounds like you have set a particular standard for a grandfather for your children and are trying to squeeze your father into that mold. It also sounds like that isn't working too well for you. Too often we set expectations and want people to become who they "should" be rather than dealing with who they really are. Your dad is who he is for all the reasons that he is. That isn't going to change. As you sit around banging your head against the brick wall of "shoulds", your children will continue to not have a grandfather figure in their lives.
We begin to be free and have choice when we allow others to be who they are. No amount of wishing, waiting, hoping, cajoling, blaming, judging has ever changed a person. See your dad for who he is (flaws and all) then make some choices for you and your family. For example, you could choose to find someone within your community to be grandpa for your kids. You could choose someone that has the qualities you are looking for such as: honest, loving, gentle, dependable, etc.
My parents are very distant from my children. I have chosen my step-mom (who really isn't even my step-mom anymore since she and my dad are divorced now) to be grandma to my children. She is consistent, loving, pays attention to their needs, fun, and willing to spend time (and the money necessary) to be with them.
I have let go of what I wanted my parents to be. I allow them to be who they are and make choices for myself accordingly. Most especially I have found resources to fill the needs that I once expected them to meet. I became really clear with myself that they just didn't have what it took to be the parents/grandparents I needed and wanted. They have always done the best they could. That best just wasn't great for me and my children.
It wasn't easy letting go. I had to grieve the loss of the parents I wanted. I spent a long time being angry and sad and depressed. However, now I am at peace. I have taken responsibility for my own well-being and released my parents from all the "shoulds" I had thrown at them.
Be aware of your beliefs about family. Be curious about those beliefs and question whether they are really working for you or not. For example, some say "blood is thicker than water" and I say "love is thicker than blood." I now have a 'family of choice'. People who support me and my children and are genuinely able to be there for us and accept us being there for them.