When you say you would only hear the foam, is that necessarily a bad thing? Wouldn't the foam act as an agent to suspend the driver and allow you to hear only the driver, uncolored by the cup?
You're right; foam isn't necessarily bad, it may help the driver sing on its own, not helped ("unloaded") nor pushed (hampered, "choked") by the wall surrounding it. But it defeats a percentage of the effect ("color") cups has on sound; you could use cheap cups interchangeably and wouldn't notice as much of a change in the sound.
When I say "a percentage"; you could look at it this way, 50% of the sound difference on a driver different cups give would be due to the fit of the driver, and the 50 other percents, because of the fact that the cup is there (versus having nothing and leaving the driver in clear air). The percentages I gave are arbitrary

, we should ask thelostMIDrange how much he would set them to.
I'm mainly recommending to the people paying money for a make over of their Grado to ask for the hole in their cups be the same diameter of the drivers that are to-be-housed, so that they can benefit 100% of the sound benefits that are to be had, if any.
Although now I'm realizing if your cups color the sound in a way that you don't like; then you would have to a) start doing like thelostMIDrange and try different cup woods/material, geometry, finish, etc. to find the cups you prefer (at this point I would recommend you to read about his experiments, or just his conclusions, to know what has already been done in the field), or b) enlarge the hole and use foam tape "to hear less your cups" -- which is some kind of contradiction.
I'm aware that people like the look of the wooden cups enough to use them even if they have a negative effect on the sound of the drivers in them, and will want to wrap their driver in foam to subtract as much as possible these effects.
Yes the sound produced by the driver will be less colored by the cup, if that's what you want.
Or are you saying the foam, because of the tight fit it creates, deadens the driver and eliminates any benefits you would get from the cup at the same time?
I would suggest you look at it this way: it's about establishing or not a connection between your cup and your driver.
Foam is too soft, the driver in it will sound the same as if you would just leave it the hole a bit too large, and no connection will be made. It's not to say that it will sound as if the driver was cup-less and held in midair, as there are some effects from the cups being around, but there is also an added, very real benefits (that thelostMIDrange proved possible) to having the driver "making one" sound emanating element with the cup, so that the cup be instrumental to the way the driver makes sound. Effects are to be had in either School A, which cups-type focus all the effort to be done to produce sound on the driver only (which will magnify both the best and the worst of the driver; can be a very desirable effect, but all in all remains a double-edged sword), or School B, helps the driver unload/share some energy -- to give you an image about the functioning of this type of cups: the whole cup resonates like a bell or an acoustic musical instrument and works in tandem with the driver (here the strings of our "musical instrument") to either or both 1) free the driver from breakup mode, erratic behaviors, distortion and/or anything negative possibly 2) color (that you can put to your advantage to cancel-out the colored aspects of the driver that you don't like and bring out what is lacking).
With drivers held in foam, you're only "50%" in a school, because foam doesn't establish enough of a physical link between the driver and the cups for them to partner up to do the sound duty. These schools are about the effect cups has on the final sound, and foam defeats 50% of this effect
(again this is a arbitrary percentage, but it could be 99% too! your foam-fitted driver would sound the same in any cups), and of the acoustic purpose of the cup itself, if you think there should be such a purpose for your cups (if you don't care about such a purpose, use foam, enjoy sooner and be done with it
.
Like I said foam isn't bad per se, and it's why I took the time to explain the whole rationale instead of answering you just a yes or a no (which answer I don't know, but that I'm happy to have helped you answering/deciding for yourself

). Sorry if I repeated myself a few times, lol