[tbworld]

Okay, I have a few more things to research, but here are the choices:

I am just making these Up:

CanAdminViewPrivateBlog (No, Always, Yes-if-member)
CanSuperModViewPrivateBlog (No, Always, Yes-if-member)
CanModeratorViewPrivateBlog (This may already exist, haven't test).

It seems to me, I would add the condition "If they are a blog member or contact" they can view the blog.

So something like this:
vB::$vbulletin->bf_misc_vbblogoptions['private'] AND is_member_of_blog

Areas that will require testing:
Moderation Blog Entry
Moderation Blog Comment
Taggable Content
Recent Blog Posts
Recent Blog Commenjts
Activity Stream
CMS Widget Recent Blog Posts
CMS Widget Recent Blog Comments.
Blog Subscription
Blog Usercp

Ahh we are beginning to see why they did not want to mess with it.