OK - update and then maybe put this to rest.
I updated the theme to 3.0 version. No difference in load times. I tried the default theme. No difference in grade changes load time.
Here is where there is a difference:
I went into a new course, created several grade items, saved them, made changes, works great. The new course I used had 29 students and 20 grade items.
Now, back to the old course (that was an import from Moodle v2.8). Where are we? 74 students and 120 gradebook items (Assignments, Quizzes, manual grade items). That is because this course is four quarters (the entire school year, Sept-June) and three periods (groups) of students. All I can figure is that this large gradebook size is causing the slow changes.