QUOTE(ansatz496 @ Mar 12 2012, 08:59 PM)
It can be helpful to practice pieces that are too difficult to some extent, but you need to be careful not to overpractice or practice them incorrectly in a way that might damage your hands. Not saying you have done this, but I can easily imagine an overenthusiastic grade 4 pianist injuring themselves on pieces like Mephisto or Campanella, considering that I was one of those pianists not too many years ago! In my case (being young and immature) there were also several occasions where I "thought" I was playing a too-difficult piece well and was satisfied with myself because my listening skills weren't developed enough to hear the flaws, but I was actually butchering it...
admittedly the examples I gave were extreme and I have never taken it past a few bars. (I can't play more then the first 9 seconds of mephisto before the stretch is too big)
Whilst I have the understanding that these injuries take a bit of time to develop, and therefore you can experiment with a song that is way above your grade, I also understand that if you become a bit too enthusiastic for a prolonged period of time, you can wake up the next morning with an injury.
So yes, be ambitious, but if you aim really high, take it very slowly. And pay attention to learning and practising the techniques before you start out.
As for butchering pieces... I think most people are probably guilty of that in the early years of music practise... And it takes a while before you learn the proper way to interpret a piece.
either way, I tend to hold the viewpoint that the majority of pieces you learn are just stepping stones towards the ones you really want to play. You can skip a few stones on the way, but make sure you don't lose your footing when you do (I don't want to take this metaphor too far).