The Scottish Public Services Ombudsman found that staff failed to conduct the operation in a "reasonable and appropriate" manner.
The patient underwent hip replacement surgery at the hospital in 2012.
Joint cement hardened quicker than it normally would. The surgeon proceeded but the man's thigh bone fractured.
Following surgery, the patient became confused and delirious and had to remain in hospital for several months.
The ombudsman concluded the absence of certain instruments in the theatre and the surgeon's decision to continue left the patient with protracted problems.
An NHS Grampian spokesperson said: "The case has already been discussed at a hospital-wide audit meeting and also by the orthopaedic department.
"A robust system is in place at Dr Gray's hospital to ensure that all the relevant equipment required is identified in advance of any procedure, and all theatre staff have completed further training to ensure they are familiar with the cement mixing system."
A complaint against NHS Grampian after a patient suffered complications during hip replacement surgery at Dr Gray's Hospital in Elgin has been upheld.