ok, first thing... dont convert to grayscale! you lose information in the channels... or rather, you cant use the channels as well, might be a bettter way of saying it. just desaturate it if you want black and white. use hue/sat.
second, yes, you want to correct the lighting. the first step of restoring is to find out what's there. and this is a good example of that. bring out the detail and in this pic it means getting some contrasting going. levels, curves, brightness/contrast, shadows/midtones/highlights, and in Paint Shop Pro, 'clarify'.
and this is why you dont want to go grayscale. in photos like this, often one channel has more detail than another. some are often so bad (often the blue channel) that it's better to completely replace one channel with another. other times you can just correct one channel. if you go grayscale, you lose a lot of that.
and, also take a look at 'channel mixer' and 'hue/sat' as a way of fixing a particular channel. often, you dont even need to separate the channels out; you just use channel mixer or hue/sat. curves can also be of use this way, since you can pick one channel to run a curve on. and levels are the same way.
once you get some detail/contrast back in the image, you're going to have to do some reconstruction, but we can deal with that when you're ready
