If I understand correctly, it sounds like you are grinding on a hardened - but not yet tempered - blade. This is not recommended. You should temper immediately after hardening.
If it went blue before heat treat, I wouldn't worry too much. It came out of the mill a whole lot hotter than that and the smiths heat it much hoter than that repeatedly while forging. If you look at the old Bob Egnath photos, his blades looked hot as - heck - while he was grinding.
After heat treat, the steel should not be allowed to get hotter than your tempering temperature. Blue is hotter. If that is the case, it is probably too soft - but not ruined (not decarbed). I agree with the advice to re-heat treat - with a few concerns about type of steel and heat treat methods.
Rob!
