David,
The Netto/Neto surname undoubted got it's start as a nickname or alcunha. "Neto" means grandson and would be appended to the "real" surname (example: Manuel Silva Neto would be the grandson of Manuel Silva). The son of Manuel Silva may have been known as Manuel Silva Filho (filho means son). Sometimes the Alcunha sticks, becomes the surname and the "real" surname is dropped.
All that being said, I would venture to say that if you traced your gggrandmother's line back a few more generations you would find a case similar to what I have described. Furthermore, these situations happen on all the islands so that it is probably not likely that you could really confirm the island of origin of the Neto surname.
good luck,
John vasconcelos