NOOOOOO not the palette bug!!! Sorry you had to experience that. I'll add that to the bug watch so it doesn't happen again 'til we can fix it!
So for the grading system, what we do is check every pixel of what you've painted compared to an "ideal" version, and depending on the percentage of errors, your score is calculated! I can get the exact percentages if you'd like, but that's the gist of it.