I did try the solution given above (with clustered index) but somehow it was not working for me.

I am not on my machine right now and do not have exactly what I was trying - but I will post the one I wrote and will appreciate if someone can point out the problem with my SQL.

I finally ended up doing a while loop - picking up MIN date and then the {{next which is 38 days or more after the one picked last for the group until no more left for the group}}

{{}} this statement above made my while loop.

Thanks for the solutions. And I will post my clustered index SQL for your expert perusal.