Steve, You started out right, but left out one step. Say 3600cM from grandparent to each child with 50% overlap between children is 1800cM. Or for both parents 3600cM (looks like 2600cM in browser). Now passing down one more generation is halved again to 900cM or a total of 1800cM from both grandparents – we agree up until now – but again there is only 50% overlap, so only a net of 900cM is shared between cousins. The nominal share between 1C is 1/8.