Can you respond with an Ambush to Graves' damage on defend?

Last paragraph correction

Yes — you can play an Ambush unit as a Reaction to Graves' "When I defend" trigger, but expect it to get hit too. Graves, Blasting Through's defend trigger goes on the Combat Chain when he's designated defender, which creates a Closed State; you (as attacker, holding Focus) can then respond with a unit that has Ambush, since it's a [Reaction] play to a battlefield where you already control units (Rule 822.1.b). The catch: your Ambush unit is played and enters play before the trigger resolves, and Graves' ability deals damage to *all* enemy units here at resolution — so the new unit will also take Graves' Might (4) in damage, likely dying, unless a replacement/prevent effect saves it. If you want the ambusher to not be damaged by Graves's ability, you'd need to put it somewhere else or play it there after its resolution, assuming of course, that you'd still have a way to play/move your unit there as an action/reaction.