So what do we mean by something as fancy-sounding as "humorously grandiose"? Well, we basically mean that Cervantes makes his writing really fancy in order to make fun of the most popular literary genre of his time, which was the chivalry book. For example, Cervantes will start a chapter with the line, "Most fortunate and happy was the age, that ushered into the world that most daring knight, Don Quixote de la Mancha!" (184.108.40.206.).
But of course, this writing is every bit as sarcastic as the voice of Sansón Carrasco, who ironically falls on his knees in front of Don Quixote and cries, "O flower of chivalry […] refulgent glory of arms, living honour, and mirror of our Spanish nation" (220.127.116.11). In both cases, you're dealing with Cervantes's humorous brand of totally overblown language.