Ok, I started from scratch because things got cluttered, and my OF illiteracy didn't help

. I'm using a ROM with just the Apollo pef, no OF code beyond what is needed for the 9200 emacs.
It turns out AAPL,gray-value is sort of a red herring. In the Apollo_A and Apollo_B nodes, it does set the color for gray screens (so, party on!). but it is not necessary for resolution setting, the Apollo NDRV does that. It is still possible it has an alpha channel and this solves things, but seems less likely to me.
The Apollo NDRV
can set all of the eMac resolutions on its own, without a gray screen. There is a big catch which caused some of my confusion. In OS 9, you have to open the monitors control panel, which will show color depth "millions" selected. You can use the arrow keys here, and any change will gray screen. Keep using the arrows, and 256 will work. Then any resolution will work as expected.
So the gray screen, at least on this machine, has to do with not setting modes, but with color depth. Still hacking on this, it's a weird problem.