I've always heard that worms love coffee grounds. How long does it take before the worms respond to the presence of the grounds and do the worms actually digest the grounds or just merely enjoy the environment that the grounds create? Seems like we're always trying to attract more earthworms to our gardens and maybe the benefit of the worms might outweigh the nutrient tie-up?

In many spots, a mowed area is virtually devoid of soil life because of compaction, the lack of OM to sustain it, ground being directly parched by the sun, one or a combo of factors. Thatch (dead grass material that's not decomposing) would be evidence of this. In any kind of spot, the amount of microbes and other soil-dwelling critters would determine the speed at which decomposition can happen. Using a mulching blade so the clippings fall back to the ground, and for chopping leaves in the fall, can help stop the process of making an unsuitable environment for microbes (and larger critters like worms.) Adding any other OM small enough to fall between the blades of grass should also help. Mow higher & more often if your schedule will allow.

>> IMHO the bottom line is probably that if you are planning on adding a lot of coffee grounds at any one time it is better composted first.

I agree, since you used the words "a lot".

>> maybe the benefit of the worms might outweigh the nutrient tie-up?

I agree with that. Also, Nitrogen deficit is only a problem when N is already the limiting nutrient.
I admit it is hard to get added soluble N to the roots faster than microbes can suck it up, but "twice-weekly, weakly" ought to do a fair job of balancing that out.

My guess is that MANY gardens have a serious OM lack, somewhat compacted soil, somewhat poor-draining soil, few worms, and/or low water-retention. They would all benefit from adding coffee grounds into the soil or in a thin mulch, or a thicker mulch with coarse matter added to keep it "open".

Probably most gardeners willing to add chemical fertilizer already have over-fertilized soil, and any temporary Nitrogen deficit would be a temporary advantage! And if improved drainage helped the excess N to leach away, that would be a huge help.

All this is just my opinion.

Thanks every one. I went out yesterday and cleared an area which I had used grounds on heavily. The worm population was unbelievable.

After all this good information I have decided that the worm situation is worth the potential sort term loss of some nitrogen. I am just going to use my coffee grounds as I want to without worrying about it.

I get about 35 wet pounds of grounds a day from a Panera Bread Bakery which they save for me in 5 gallon pails I supplied them. I pick up the grounds daily at one of their slow times.