Ok, I've been playing around with PropertyGrid conversion methods...
And, I created a PropertyGrid Material dropdown control, so that you can add the custom editor as an attribute for the property item, that will create a downarrow, which expands to a material selection box

Of course, you can only change the entire entities material.. I had the though that I would create additional tree nodes under the entity treenode to change subentity properties in the WGE Scene Viewer

This will be ideal, as I do not intent to add submesh/subentity picking to the editor.. so, that would be the only way to change subentit properties.