Spain my be a bit different to Turkey, I was surprised when we hired a couple of decent Fuji hardtails on Fuerteventura, XT equiped etc and a reasonable price. have you Googled bike shops near Granada, would have thought that MTB'ing would be quite popular there.
As for insurance check you've got personal accident included on your travel insurance whilst MTB'ing, I've seen a few policies that don't cover it! Not sure about damage or theft but I'm sure the insurance companies in the back of MBR will oblige, given the sufficient amount of readies.