If a player without any fielding grades listed for a particular position is inserted into that position, his skills at his primary position are translated to the new position. A designated hitter that did not play in the field is treated as a D-/D- first baseman. He is then slapped with a mandatory out of position penalty.
From there, he is penalized for each spot he moves to the left on the Bill James' Defensive Spectrum. For example, moving Ozzie Smith from SS to 2B would still yield an above average 2B. Moving Jim Thome to SS, on the other hand, would result in an atrocious SS. Moving Thome to LF would not be as drastic a penalty since SS is a more difficult position.