I'm reasonably sure that in the context "Grinder" refers to one who tutors dull or lazy university undergraduates. I tried diligently, but without success to find site confirming my opinion. UK members, please comment.
"By degrees I learnt, and chiefly from Herbert, that Mr. Pocket had been educated at Harrow and at Cambridge, where he had distinguished himself; but that when he had had the happiness of marrying Mrs. Pocket very early in life, he had impaired his prospects and taken up the calling of a Grinder. After grinding a number of dull blades - of whom it was remarkable that their fathers, when influential, were always going to help him to preferment, but always forgot to do it when the blades had left the Grindstone - he had wearied of that poor work and had come to London. Here, after gradually failing in loftier hopes, he had "read" with divers who had lacked opportunities or neglected them, and had refurbished divers others for special occasions, and had turned his acquirements to the account of literary compilation and correction, and on such means, added to some very moderate private resources, still maintained the house I saw."

You're absolutely on the money, Bill. I don't know if this is the origin of the phrase (I suspect not, as it seems such an obvious image of a slow abrasive process) but Dickens' character Mr Gradgrind comes to mind...

http://www.doceo.co.uk/background/gradgrind.htm

Perhaps Hard Times could join your reading list if you are enjoying Dickens just now? ~ tho' I must admit I never liked it but!