OK, with the help of a friend I was able to get this done. I ditched the wp_list_bookmarks and went with a combination of get_terms and get_bookmarks.
function blogroll_page( $args = array() ) {
if(is_page('blogroll')) {
if( $terms = get_terms( 'link_category', $args = array('exclude' => 16) ) )
{
foreach( $terms as $c )
{
printf( '<h3>%s</h3>', $c->name );
printf( '<p>%s</p>', $c->description );
if( $bookmarks = get_bookmarks( array( 'category' => $c->term_id ) ) )
{
printf( '<ul class="xoxo bookmarks">' );
foreach( $bookmarks as $bm )
printf( '<li><a href="https://wordpress.stackexchange.com/questions/3139/%s" title="https://wordpress.stackexchange.com/questions/3139/%s">%s</a></li>', $bm->link_url, $bm->link_description, $bm->link_name );
printf( '</ul>' );
}
}
}
}
}