Protect your wall tiles with cardboard and take a hammer to the row of counter top tiles that are against the wall. Break them up good. Wearing gloves and using putty knives and screwdrives pull out all the little pieces of tile from that row closest to the wall. Wiggle them out from under the backsplash tile, they should come out fairly easily. This clears a distance the thickness of the tile for the counter to pivot up upon removal before it contacts and loads your backsplash tiles. If that proves to not be enough set the depth right on a circular saw or rotozip and zip through the cement board and pry that off too. It will take more finesse then normally is used when demoing kitchens but with a little caution, it should be very doable.

Found the right search: "tile backsplash granite counter" and sure enough many people have asked. Here's one: http://ths.gardenweb.com/discussions/2696049/3-granite-backsplash-needed-if-plan-to-tile-backsplash-kitchen?n=5 Takeaway is that it is definitely not necessary and the majority of people don't like it with the extra granite piece. Someone observed that this probably ends up this way most often when the tile was added later over the original granite backsplash.

Did you look at the Cambria edge profiles? They are available in different thicknesses. Another alternative would be to do a mitered edge. Probably more expensive than the plywood, but a more finished look?

Thanks Patricia...paled grayed green sounds appealing-Ill look at those colors...as for cabinets-yes, theyll be installed directly on the log wall...we're blessed with an amazing cabinetmaker who is skilled in log home cabinet installation....we also have kiln dried logs-so they wont shrink/settle too much. Ill attach a pic (not a great one, but the only I could find at the moment) of the lower furing wall we had originally built for the lowers--then tore out-because that would have made a backsplash stick out several inches-a ledge--it would have looked weird, & would have pushed fridge & cabinets out too..eating up several inches of kitchen space. So, we took out the furing wall-moved the fridge outlet to the corner, literally, of the log wall & drywall (can see it in my 1st pic of original post-midway up the wall) & plumbing was able to come up through the floor instead of the wall-I conceded & instead of a wall switch am doing an air switch in counter for disposal-only thing left was switch for over sink light-which for convenience-I wanted near the sink-so we're doing a shallow mount light switch under the upper cabinet, to right of sink-unconventional I believe-but a good tradeoff in my mind. Our cabinetmaker is making the upper cabinet rails a little longer anyway for lights/outlets under the cabinets-so I think it will work out ok. I may need to always point out to guests where that switch is-but worth it in order to have a normal 4" granite backsplash on the log wall. The tile will cover the open areas on the drywall/range side--including behind the chimney hood. Sooo..thats the plan-its been one of those ongoing challenges that went on for quite some time-& we finally got everyomes input & solved the problem..yay! :) Now for the fun stuff :)