I find the N805 sounds best with grills off. Did not have the same localization issues you mentioned: might want to check & make sure all of the mid/woofer screws are properly tightened.
Some tweaks I found very valuable (and fairly easily reversible):
Remove the protective screens in front of the tweeters. They either resonate or muck up the dispersion...but whatever the cause, the speakers sound much better without 'em!
Unscrew the phase plugs from the mid/woofer (quite easy, just grab 'em and turn counterclockwise). You will find the plugs are hollow plastic. Buy some non-hardening modelling clay/putty and pack it into the hollow areas. Make SURE that the clay/putty is a bit recessed at then end so it does not squeeze out & gum up the coil gap! This tweak is a bit subtle at first, but you'll find everything sounds more natural (perhaps that's why B&W went to a SOLID aluminum plug in the N805 Signature?).
Anyway, good luck & enjoy!
David