I don't do the party grounding as a rule, because it does affect the hosts at the last minute, which violates a cardinal family rule. Usually I just extend the actual grounding/no computer/no tv/etc, etc at home period instead.
Sleepovers and other casual outings--You bet. My older daughter said at the last one, "But that's unfair to Friend." I said, "Well, that's another unfortunate consequence of your behavior. It affects other people negatively, too. So you need to make better choices next time."
If her behavior was egregious enough, however, I'd take away the party as well. And thankfully, her friends' mothers would be supportive.
We've had the enlightening experience of watching another dancer, a very gifted one, derail because of her horrible attitude, as enabled by her mother, and missing a party is far less serious in the long run than missing a scholarship.