Hi!
I have a grid control with 3 columns on it. Say "Column1", "Column2" and "Column3". Now I drag "Column1" and place it in Group Panel. My data is now grouped by "Column1". Again I drag "Column2" and place it in Group Panel. Works fine and data in my grid gets grouped in two level. Now if you try to drag "Column3" and place in group panel it won't work as "Column3" is the only column available in the grid now. However if you click on the "Column3" header you will notice the menu "Group By This Column" is still enabled. If I hide the group panel and still do the grouping using the menu then there is not way to un-group the columns.
I have attached a sample application [GridGroupingTest.zip] using which you can check it. Alll you have to do it right click on Column3 and say Group By this column.