A few days ago when I got back from being AFK I noticed in the chat log that some people were talking about growing grass in the Nether and if it was possible. I think they even mentioned asking an admin to spawn a grass block to try it out. I'm not sure what happened since then and forgot about this until just now.
Since I've been playing around with enchanting I got Silk Touch on one of my pickaxes and was mining some Stone (rather than Cobblestone) I wasn't really paying attention and mined some grass blocks and it let me keep the grass block in my Inventory.
As soon as I saw this I remembered the conversation and went to the nether and placed the block. Sure enough it works. I put some bare dirt next to it and it even grew across covering all the dirt blocks,
So yes it's possible and if anyone is interested I can help supply the grass blocks while this pickaxe is still usable, just let me know.