Thanks for your reply.
If your husband was born in the UK before 1983 then he will be a UK citizen otherwise than by descent (unless he was born to parents who had diplomatic immunity, which I assume he wasn't). Confirmation here:-
This means that he is free to pass on his citizenship to such of his children that are born outside the UK. This means that your children are UK citizens. However, the type of citizenship they have is "citizenship by descent", which means that they have exactly the same rights as other citizens except that they will not be able to pass on their citizenship automatically to their children (ie. your grandchildren) if they are born outside the UK.
If you previously obtained a spouse visa then you would have been given leave to remain. If you left the UK after 9 months then you would not have fulfilled the residential requirements to apply for indefinite leave to remain (two years was required as a probationary period at the time). If you were in your probationary period then this would have lapsed now, so you would not be able to pick it up from where you left of (so to speak)..
Upon application for a spouse visa if the spouses had been married for 4 years then they may have been given "indefinite leave to remain", which is the permanent right to remain in the UK. I assume this does not apply to you.
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There is nothing precluding you from applying for an ancestry visa provided that you are eligible for one. However you would of course have to prove that your grandmother was born in the UK.