[Ron Wood]

This is an interesting piece. First, for Big Norm, '29s do not have strawed parts. Second, for Ron, it is hard to tell from the photos whether it has been reblued. I don't think it has, but it wouldn't be unusual for a Swiss to be reblued, since they were routinely refurbished by the Swiss, and this does not detract much from their value.
Now, if this Luger's serial number is just 780xx, indicating a military Luger, and not P780xx indicating a commercial, that is remarkable in that it is probably 70 or 80 numbers higher than the last "ordnance", or military, '29 Swiss produced according to Bobba (77941 in 1946). The commercials, again according to Bobba, went up to P78258, which would, if commercial, knock this one out of the "last 10 produced".
OK, let's talk about the "prototype" status. What makes it a prototype? There are several examples of 9mm Swiss '29s. One example is 68254, that was probably made around 1943 for evaluation of the 9mm caliber. This serial number certainly predates a 780xx piece, so no experimental label can necessarily be attributed from that standpoint. Several P prefix, or commercial, pieces were made up in 9mm as early as P26xxx, so that rules that out too. I see nothing in the photos that indicates a configuration that would warrant an "experimental" designation.
Having said all that, as Thor observed, the gun does appear to be a "real deal" and certainly worthy of further exploration. The serial number makes it unique enough that brown grips are of a lesser concern than the overall authenticity of the piece.
Would a real expert please step in and clear this up for us?!!