Which part of Poland would my grandfather (most likely) have been from?

If my grandfather lived in Western Ukraine (South-East Poland) but he was originally from Poland, where was he from (most likely)?

From your information, probably South East Poland, but really he could have been born anywhere in Poland. Most likely doesn't mean anything really, without further information to go on.

His surname was the most common in Masuria, could he have been a Pole from Masuria?

Well he might have been but how is anyone who replies to you really going to know? The one thing I have found through tracing family history is that you cannot take anything for granted. Yes, if that name is common to Masuria, he may well be from that region, but if there are other areas where that name is prevalent also, he could equally have been from there. Or from somewhere where it is less common altogether.

In genealogy, "might" and "could" don't mean very much, if anything. Only "did" and "was" do, and you get there only with real documents or first-hand accounts.