Just finished sophomore year of undergrad at a severely grade-inflated institution, and have been receiving relatively "low" grades for all but one semester. Since I first discovered my intense interest in physics freshman year, I've really been pushing myself to take more challenging courses. I elected to skip half the intro sequence for more advanced courses (atypical at my school), and I've done well in the grad courses I've taken. However my grades for physics undergrad classes are lackluster "at best". I don't find the material particularly challenging, and I'm confident I could ace my finals if they weren't one after another during finals period (this happened during the one semester I aced). My long term goals involve physics grad school (most likely theory). Have I completely shot myself in the foot with respect to grad school admissions? Moreover, should I start taking easier courses? On one hand I get a thrill out of taking these more challenging courses; on the other hand, I understand that grad schools can't exactly brush my less-than-flawless transcript under the rug and "do what you love" idealism has its limits.