Well, it may or may not be actually bypassing the preamp. What it is bypassing is the additional 40 DB or more of needless application.

If you plug a microphone preamp output into a microphone preamp input you are overblowing the inputs to the preamp by plugging into the front. When you plug into the rear it may be doing nothing more than including a 20 DB pad while lowering the preamp gain structure 20 to 30 DB. And that way, you wouldn't be overdriving your first stage preamp which as you know by now sounds like total crap. Having purchased your Grace preamp is sort of like pouring perfume on a skunk. It's still awful. The resident preamp on your audio interface is probably more than adequate but your inexperience makes you grab at something you think will yield a better product because of the $you spent? Proper gain staging and microphones selection and placement will do more for your sound than purchasing expensive stuff to compensate for a lack of experience and technique. Learn how to make really lovely recordings with your existing equipment first because it's not the equipment that prevent you from making good recordings.

But then again, it could be physically bypassing the first stage microphone preamp? It's hard to say.

SHOW ME THE SCHEMATIC!
Ms. Remy Ann David

Well...

I looked for the schematic (or even a sh*tty block diagram which seems more common nowadays - which is unfortunate since in most cases it doesn't tell you where the mic preamp is - simply the gain stage...a big difference!!) and I couldn't find it.

However, digging through the manual, I found this:

Presonus Manual wrote:
The FIREPOD features ¼” TRS balanced Send and Return jacks on Channels 1 and 2. These jacks are
labeled as Preamp Output (SEND) and Line Input (Return). These connectors allow the use of external
processors such as reverbs, de-essers, limiters, EQ’s, etc. Simply connect the Preamp Output jack, balanced
or unbalanced to the input of the external processor. Then connect the FirePod’s Line Input jack to the output
of the external processor.

This leads me to believe that the input is post mic-pre, pre-gain-stage.

Therefore, the addition of the Grace could be quite welcome.

Cheers-

J.

A bit further down in the FP10 manual, it says:

Line Inputs. These are the line-level inputs for channels 1 & 2. Their gain structure is identical to the ¼” inputs for channels 3-8 and are typically used for signals not requiring preamplification (like CD/MP3 players, effects processors, etc.)

and it also states that the gain structure for the line inputs on channels 3-8 (the TRS input part of the combo jack) is:

TRS ¼” Line Inputs. -10dB to +10dB trim adjustment

There is also an unofficial block diagram at: http://www.presonus.com/forums/showthread.php?t=2444

From this, I think you should be OK to use either the line input on the back panel of any of inputs 3-8 on the front panel.