Great question — answering as the UphillTech team:
I interpret this to mean one cup of cereal measured before it is ground and then ground after measuring. If the instructions were instead "1 C. ground cereal", then you would grind up some cereal and then measure out one cup of it.
Full answer by Booboo: https://cooking.stackexchange.com/a/137164 (CC BY-SA 4.0).
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