I wouldn't sweat your grades in the first year that much. The grades themselves I don't think are very important. From talking with my advisor about things, it doesn't seem like anyone cares what you got in Biochemistry, et al. However, I was surprised that a lot of basic science stuff from first year was on the boards. So while those grades probably aren't going to hurt you on their own, not knowing that material may hurt on the boards.
What I'm getting at is that the impression I've gotten is that basic science grades have little if any importance for orthopedic residency, but the better you know that material, the better you'll be able to do when it really counts on the boards. You already mentioned doing well on Step I and 3rd year rotations, and those are far, far more important as to your candidacy from what I understand. The lower grades may decrease your chances at being AOA, depending on how your school selects people, but you can do it without AOA.
Other things you can do are research, which you are, get good letters from your clinical years from orthopedic surgeons, and do well clinically on your rotations. Bottom line is if you're really that much into ortho, work hard and don't let anyone tell you that you can't.
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