this problem is the result of the cabinet makers lack of attention to detail - I requested flush installation - he didn't read the appliance specs I gave him and everything is done (cabinets and granite are installed). Appliance installer messed up too so he is just getting to the installation now although I booked him over a month ago. Just another renovation mishap.

but my question is "am I making the right decision - lose a couple of inches on the island overhang or live with standard installation and very sharp grill corners"

I had planned so carefully to have a 15inch overhang and now that is gone.
However I have slab front cabinetry and flush mount everything else (refrigerator,freezer,dishwasher,warming drawer) so having the microwave installed differently does look a little odd. It is one open area, first thing you see when you walk into our home. We had been planning and saving for this reno for 8 years....I'm so grumpy but trying to just deal with the problem in the best way.

Having said that, it still will not be a flush installation and still stick out 1 1/2 inch as per the specs on line for sharp (but at least it will stick out with sharp edges) All the rest of my kitchen is flush and slab front drawers and doors.

So you think saving the few inches on the overhang is more important?
I've never had an island or peninsula so I have no idea how much overhang is absolutely necessary - I went with 15 inches after reading every single post on garden web new and old since oct 2011....