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Saying this, I assume you are wondering if a higher PR more generic category listing will benefit you more than being listed deeper in a more on-topic category.
For the most benefit, pagerank, visits, conversions and in general, I'd vote for the most on-topic category, but it's a bit of a general question.
//added
if its a commercial site then I guess the chances of you getting the move could be a bit better/expensive?
Are they going to do it for free...or how long will it take to do a freebie? Just some food for thought, to be honest I don't know.
Can't see myself using the category matches as a tool when it only goes two levels deep. When do people ever want to click more than once in a websearch to get what theyre looking for....just an IMO.
More on topic just seems more like more long term benefit in any event.
I tend to always go for the higher category, even if it has more sites. I tend to find that the higher up categories get more traffic and more exposure in the SERP's - often they get returned as relevant cat's for a keyword search.
Since it's grandfathered, I wouldn't try to do anything to it. They might charge you for the changes.
We've had experience changing Yahoo! listings (both grandfathered and paid directory listings)...Requesting a change to a grandfathered listing, in the one experience we had, DID NOT result in Yahoo! charging us. However, it's difficult to say how long the change will take, and it most likely will be necessary to make more than one request (make sure to note the date of your first request, because Yahoo! editors seem not to respond to second requests unless you've offered this information).
~Canton