First, why do you want to re-blue it? IMO it will take away all the character it has and all the history. A lot of the marks & wear on it were put there by your grandfather as if he were writing you a story - you will be erasing that story and any sign that your grandfather ever even touched it. I think you are making a mistake by refinishing it - it won't shoot any better and instead of looking like a family heirloom it will look like it just came off the gun rack at WallMart.
If you are set on re-finishing it the sights have to be driven out of the dovetail from left to right and put back right to left. The screws in the rear sight have nothing to do with mounting it - the rear one adjusts the elevation and the front is for windage adjustment. The lifer/carrier is held by a sleeve that has to be driven out.
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