See this post towards the end -I also have a K8 and asked the same question !: http://coffeesnobs.com.au/YaBB.pl?num=1262592724/22#22
To see what the other CS posters are talking about, have the look at the photos here: http://www.home-barista.com/grinders/when-are-burrs-worn-t12113.html
On my K8 (an older model with the stepped ajustment) I can screw the blades right down until they touch, effectively grinding fine enouigh to choke my machines - even with worn blades.
There may be coffee gunk preventing you adjust the grinder fine enough.
So when you inspect the blades, give everything a really good clean so you can adjust the blades so they touch, then back off a few notches and try a grind.