After much battling I've finally gotten quite close to my goal for implementing these accursed physics.
Terrain collisions are working as well as I could possibly hope, and the Rope isn't doing too bad either. Below you'll find a video showing how the roping looks in action. As for collisions, I changed from the weird collision area XML definition, to a much simpler outward in cross, and it seems to work great (at least with my circle test sprite) We'll see how it pans out later in the cycle. =D