Ok Mike Unless you change the dip switch setting (on the driver) for the micro steps you don't need to touch that.
That setting is to set up the machine so that when you tell the machine move say 50mm it actually moves 50mm.
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I would now move the steps to 1/4 which would be 160 by setting K1 and K2 (look the switch position up in the manual) on the driver and then change the Mach3 steps from 320 to 160. (re read EddyCurrent post #5).
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See how it runs then. Just change one thing at a time. When you say grinding noise, are you running the motors on or off the machine? ..Clive