Place the value you want to find in a column in the grid. Then hide that column. Then you can find that value in the ddl. You are correct in that you need to use the ItemDataBound event.
Something like:
Dim ddl As DropDownList
Dim ddlEmployees As DropDownList
ddl = CType(e.Item.FindControl("<YourDDL>"), DropDownList)
'Set the drop down list to show the value you want.
ddl.Items.FindByValue(e.Item.Cells(<cellindex).Tex t).Selected = True 'This is the hidden column.
Jim
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