grounding/not grounding in hazard

Here's a rule that I've never completely understood. It came up again a few days ago when my ball ended up on the beach near a lake that was marked as a lateral water hazard. The ball was sitting on the sand surrounded by about six inches of grass. Like an idiot, I'm going to try the hero shot and wedge the ball back into the fairway. I know that I can't ground the club on the sand itself, but what about touching the grass? Does the "no-grounding" rule mean that I have to hold the club at address ABOVE the grass? Seems that would make the shot difficult from a hand-eye coordination standpoint to start the swing with the club head more than six inches above the ball. Also, if I understand the rule correctly, the club head can touch the grass on the downswing but not on the backswing? I believe that Carl Petterson and Brian Davis both got in trouble with this one a few years ago at separate events. Please advise.

See these decisions

http://www.usga.org/Rule-Books/Rules-of-Golf/Decision-13/#d13-4-4

http://www.usga.org/Rule-Books/Rules-of-Golf/Decision-13/#d13-4-8

This is a rule I have to be careful of.  I was playing last week (in a silly 6-hole, couples, alternate shot "tournament") and our ball was sitting on the red line defining the edge of the hazard.  I walked up to it and took a couple of normal practice swings in the hazard.  Didn't care, obviously, because the tournament was totally for fun, but what made me worry is that it never crossed my mind until after the shot.

Had this happened in a real tournament I would have really screwed myself.