On one side of the house we have a concrete path that has serious
water damage. I would like to remove the path, grade the soil, and
improve the grading.

I believe the concrete path is serving to trap some of the rain water,
because if I extend the roof leaders beyond the path (to about 6' away
from the foundation) I get more water in my basement. I get less water
when the leaders open directly onto the path, even though it is 2'
closer to the house.

I'm afraid if I simply remove the concrete path, more water will
actually make it to the house. I want to do whatever I can to improve
the grading of the soil and minimize the amount of water absorbed
close to the foundation.

I don't have much room for grading because there is only about 12" of
foundation exposed. What is the best way to ensure that rain/roof
water gets as far away from the house as possible? Can I install
gravel underneath the top soil? Can I plant shrubbery or other thirsty
vegetation? Should I leave the concrete path since it apparently slows
down the water entry?

Any advice would be appreciated...