William,
Thank you for your reply. I guess I wasn't clear on what the instructor would like to do. He uses the assignment module (online and upload file) and wants the students to only see the feedback he gives but not the grade. I can see where this could be useful if you want students to focus on the feedback and not the grade before doing a rewrite or resubmission. Right now you can hide the grade, but from everything I have read that also hides the feedback. The workshop module that you linked to really doesn't match how he uses Moodle in his course. I am thinking he may have to have two windows open, one for the assignment he is grading and the other the participants list, and whenever he wants to give feedback to a particular student he clicks on them in the participants list and sends it to them through the messaging system.
Do you think there would be interest in a setting in the hide grade feature that would allow instructors to hide the grade, but show the feedback?