I apparently never posted the solution that I found... my bad.
The issue is that when displaying a query result, the "Custom Query" resource requires that the first column to contain sort-able values that are non-calculated (read directly queried values). A blank or space isn't, so it fails. The way I was able to get around this is to hide the first column by putting a "_" on the column label. So my query became:
SELECT n.Severity as [_Severity], ' ' as [ ], n.Caption as [Node Name], '/Orion/images/StatusIcons/Small-' + n.StatusIcon as [_IconFor_ ], n.StatusDescription FROM Orion.Nodes n WHERE n.Status<> 9 and n.Severity > 0
Now it works.
Just in case someone else out there has a similar issue.