I've seen this as well, and it's obviously a glitch.
The point to the original posters post was going into the options dialog, making a modification here or there (enough to be able to hit apply) makes the grading object work perfectly.
So Autodesk, what's the connection between grading functionality and the Autodesk Registry File (.arg)?
Try it, next time you want to grade from a featureline to an existing surface and the program locks up, kill the process, open it back up, and open the same file with the same featureline.
Then go into your options dialog, make some changes so you can hit apply, then hit ok.
Now you'll be able to grade your featureline with no problems. (for awhile)
Make sence? NO, but grading functionality has always been flakey and unreliable.