The area of County Leitrim that you are referring to is the civil parish of Oughteragh which includes the town of Ballinamore. Lough Garadice is one of many lakes that appear in the landscape as Leitrim ends in the east and County Cavan starts.
There were a number of Gaffneys in this area including several Patricks who were in the 16 to 20 age range in the 1901 census. Would those ages fit with your great grandfather ?
The Houlihan name (no matter how it is spelled) is very uncommon in this part of Ireland. Perhaps his wife's family came as merchants to the area or they met elsewhere ? I read that there were a few families of this name in the nearby County Cavan.
I hope this information is helpful to you in your search.
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