What are some signs of potential goodness in Grendel? What prevents these "seeds" of goodness from developing?
Even though Grendel is at war with mankind, Grendel may have once been human:
With fulsome monsters/This sorrowful man had stayed awhile,/Since the Shaper had condemned him/as Cain's kinsman. (ll. 104-107)
The poem hints that although Grendel has become a monster he may have begun life as part of mankind, but as a kinsman of Cain, who killed his brother Abel and was banished from man by God, Grendel, too, was banished to the company of monsters called "eotens and elves and orkneys, as well as giants, who fought with God." The implication is that Grendel may have transformed from man to monster because of the company he keeps.
Other than the fact that Grendel might have been part of mankind, there is little evidence in the poem to indicate that Grendel has any feelings other than hatred for men. One can argue, however, that Grendel is a victim of his heritage--as a kinsman of Cain, and through no fault of his own, Grendel became a monster in part because he was forced to live with monsters. The "seeds" of goodness, then, may have existed only for a brief time in Grendel's life and never had the opportunity to develop.
It is always a temptation to “psychologize” fictive characters, especially after the Renaissance and into modern literary history, but an epic like Beowulf and a symbolic figure such as Grendel should not be subjected to psychological analysis if the reader thinks that such an approach will enlighten him/her or reveal something about the author’s motives. Grendel is not even human; it is an animation of natural forces resisting Beowulf’s presence in Heorot. True, it has an “arm” or limb of sorts, but that is not enough evidence to give it a "psychology." Perhaps if one must find a “potential goodness” we might point to Grendel’s return to its mother’s pool for comfort after his battle.