Here's some info on what the difference between the grades are :
OFA: Patellar Luxation Grades
and some other info:
OFA: Patellar Luxation Information
Uni has grade 3 but has only hiked up one leg once. She is on cosequin and is doing great.
How old is your yorkie, bc most young pups will always have loose kneecaps. They should be evaluated again when they get older.