Hi Simon,
I was going over this story and a couple of avenues of investigation have opened.
At the National Archives at Kew there is an evasion report (W0208/3321, report # 2093) filled out by the Flight Engineer of PB265, 1021030 Sgt. A. Balfour. None of the other surviving crew, your grandfather included, submitted a report. It is worth getting a copy of this as it will explain the sequence of events.
Also, the Sgt A. Balfour you have being killed in Halifax NP771 in November of 1944 is a different man than the Engineer in your grandfather's crew. This man was a Canadian air gunner, posthumously promoted to pilot officer, whose service number was J95200, a clearly Canadian number.
You should also contact the Department of Research and Information Services at the RAF Museum and request the "loss cards" for both PB265 and ME801. Lots of information on these. You can ask for them by email and it usually takes about 20 days and costs nothing:
Contact the Department of Research & Information Services