It has been officially confirmed that General Iroh II is in fact Zuko's grandson. He is not his son, nor his great-nephew. So now we can all stop wondering about that.
Now there's the issue of who his father is... (I say it might be Aang's son Bumi, but that's just me. XD)
Here's the proof for all of you who just might not believe me-fullmetalavatar.tumblr.com/pos…
So there you go folks! Zuko's official grandson!
(Wonder if we'll ever get to see Grandpa...)