I have no idea if this story that Lt. GW Bush was grounded for cowardice is true. I have no idea how you would tell.
The story, unlike the one by Swift Boat Vets for Lies, has the merit of being consistent with much of the documentary evidence. (I would have expected to see something about this in the medical section of his file? Is this why he didn't report for they physical, because they planned psychological tests?) It may also explain why GW Bush has never produced his separation codes.
But there's no way to tell now, I'd wager.
One thing is for sure: even though it is more plausible than the Swift Vets' tall tale, this story will never get one one-hundreth of the media play.