So to get things in order..

Wii is 4.3u softmodded and Neogamma R9 56 installed, I have used it both via install with Wad Manager and Homebrew channel.

The backup of NSMB is properly patched, I confirmed that with a Hex editor and checking the main.dol file.

The game loads up fine, I didn't encounter any of the errors many people have. I can even start the game fine. After playing for a while the game will give the black screen and the error message telling me I need to reboot my system. I saw it once when I let the game loop on the menu for a while and starting it past the first cutscene with everyone being shot out of a cannon. I shut everything down and reloaded a save. Was able to play the whole first level fine, moved on to the second, and then part way through that the game crashed to the error screen again.

I am playing it via DVD, not USB drive.

Is this a known issue? I have only seen reports of people being unable to load the game at all, not being able to load, play, and then crash.