Index: lib/grade/grade_item.php
===================================================================
RCS file: /cvsroot/moodle/moodle/lib/grade/grade_item.php,v
retrieving revision 1.130.2.35
diff -u -r1.130.2.35 grade_item.php
--- lib/grade/grade_item.php	3 Feb 2010 02:22:58 -0000	1.130.2.35
+++ lib/grade/grade_item.php	31 Mar 2010 13:43:50 -0000
@@ -1448,8 +1448,6 @@
         if ($finalgrade !== false) {
             if ($this->is_overridable_item()) {
                 $grade->overridden = time();
-            } else {
-                $grade->overridden = 0;
             }
 
             $grade->finalgrade = $this->bounded_grade($finalgrade);
@@ -1474,7 +1472,7 @@
         } else if (grade_floats_different($grade->finalgrade, $oldgrade->finalgrade)
                 or $grade->feedback       !== $oldgrade->feedback
                 or $grade->feedbackformat != $oldgrade->feedbackformat
-                or $grade->overridden     != $oldgrade->overridden) {
+                or ($oldgrade->overridden == 0 and $grade->overridden > 0)) {
             $grade->timemodified = time(); // hack alert - date graded
             $result = $grade->update($source);
         } else {