Is it permissible to make use of a pen that a grandfather found wrapped around his ghutra, and then gave to his grandson, knowing that the pen is expensive?

The pen must be returned to the Lost and Found office in the administration of the Prophet's Mosque, as it is the competent authority for dealing with lost items. It should not have been taken in the first place, but rather handed over directly to the office. A valuable lost item (luqatah) may not be possessed except for the purpose of identifying it in its place of finding, which is not applicable to the questioner as he is not a resident of Medina. Therefore, it must be handed over to those who perform this role, which is the Lost and Found office.