Sorry no suggestions, but just wanted to say my DD started grinding her teeth at about 8 months, she is now 14 months and does it on and off. I figure there is not alot i can do about it, so i don't make a big deal of it and hope she stops. And like you say, try and distract her with something else.
I have asked a few people about it and it seems pretty common.

You could always ask your dentist what their thoughts were....