What’s to explain?
Listen to the tape. You will never once hear her voice say Obama was born in Kenya. You will hear some guy say it, but then he is immediately corrected by Obama’s family (to include the grandmother) that he is wrong, and that Obama was born in Hawaii, not Kenya.
The "some guy" who says Obama was born in Kenya is the tranlator. Berg says the grandmother said it in her native tongue, which is audible.
Then, as you say "he is immediately corrected by Obama's family" which I and Berg interpret to mean that the correct translation caused panic in the family who signal to grandma that she stuck her foot in it and she then changes her story.
When I listen to the tape I hear the interjecting family members loudly and exitedly coaching grandma in a panic to contradict the correct translation of her report of a Kenya birth and to get her to say "He was born in Hawaii".
Your mileage may vary.
See WND story:
http://www.wnd.com/index.php?fa=PAGE.view&pageId=107524