I am feeding a 50 amp subpanel and would like to down size the ground and nuetral to a #8 thhn. Can this be done?

Sorry, no, regarding the neutral, as per the 2008 edition of the NEC, see item #2:

(B) Permitted Reductions. A service or feeder supplying the following loads shall be permitted to have an additional demand factor of 70 percent applied to the amount in 220.61(B)(1) or portion of the amount in 220.61(B)(2) determined by the basic calculation:

(1) A feeder or service supplying household electric ranges,wall-mounted ovens, counter-mounted cooking units, and electric dryers, where the maximum unbalanced load has been determined in accordance with Table 220.55 for ranges and Table 220.54 for dryers.

(2) That portion of the unbalanced load in excess of 200 amperes where the feeder or service is supplied from a 3-wire dc or single-phase ac system; or a 4-wire, 3-phase, 3-wire, 2-phase system; or a 5-wire, 2-phase system.

Your feeder is under 200 amps, so not applicable.

Your green equipment ground can be #10 copper.