Question

Can Studio 192 Instrument inputs 1 & 2 function as line inputs if set to zero gain?

Answer 1

Technically speaking, no you can't.  There are differences in impedance and voltage of the signal for each type, and it's important to properly match these for best signal quality.

You will need to use a DI box to convert from Line Level to XLR mic level, and plug into the XLR inputs of the 192.

Check out this guide on line level signals.

http://www.ovnilab.com/articles/linelevel.shtml

Answer 2

What if I have

Grace Design Preamp ---> DI box ---> Studio 192 input 1 XLR ?

Isn't it bad for the signal to go through 2 preamps ?