Michael,
I've dealt with the same issue and ended up building an x-block, based on the SGA x-block, to grade students in a class for things like participation. It isn't automated, but it lets course faculty see all their students and give them a grade.
I call it the "Flex-Grader" and I use it for exactly this purpose. I literally just made the code public, so it might be a bit buggy on your instance, but if you want to give it a shot and let me know what issues you face, I can probably help.
I think the largest class I've seen this work for is 300.
John