Freshly squeeze grapefruit (not lemon) juice emulsifies the oil and makes it much more palatable. I think it is the enzyme reaction, which dissapates with exposure to air and light after squeezing (and even starts disspating after the fruit is picked).
So, start with a fresh grapefruit from a reputable market or farmers market. If you squeeze it early, put it in a tightly sealed container with as little air space at the top as possible. Then wrap the bottle in foil to keep out the light and put it in the fridge.
When you mix the grapefruit juice with the olive oil, it should almost eliminate the oily taste. The first time, I was astonished at how good the mixture was. Reminded me of a wonderful salad dressing I made on Thanksgiving one year.