Your first guess (3x3 with 4 exra squares) is correct.
Although it's worth noting that this is not equivalent to movement, as his attack can travel through units and walls.
Also (and this is something I had missed), Gror needs to be making a melee attack FIRST before he activates his ability. You can't attack a unit with Gror from two spaces away, unless there's something adjacent that he can actually swing at.
Yeah, we got that. he attacked a wall to set it off. It also damages his own units and walls, correct?...