Re: grandfather's mustache
i know you said this is all you have access to, but if you can get something closer to the original, or the original, it would probably be easier. also, it's normally better to scan in at least 8 bit color rather than gray. what you have is pretty pixelated/noisy and it's quite tough to separate out the definitions here.
however, it's not totally hopeless. i tried a number of things on it, median filter, polaroid dust and scratches filter, despeckle, jpg artifact removal, salt and pepper filter and so on. i did each of these as a separate layer, but not progressive one after the other. rather, i did one filter on a new layer and then turned that layer off and duplicated the original again and applied another filter to that duplicate. i stacked all these turned off layers on top of each other and from the bottom of the stack, closest to the background layer, i turned one on and set what appeared to be the best blend mode for that particular layer. i just kept doing that all the way up the stack. the results were... ok, but nothing great.
if i had to choose one action/filter that worked the best, i'd say the polaroid dust and scratch filter, using it on both light and dark specks and with adaptive filtering turned on on the dark layer.
you could also try airbrushing on a blank layer to essentially draw in the moustache based on available data. that might work better than anything.