Do you sense that your bishop's discomfort is based on a sense of propriety or conformity? From what you have said, it seems the latter. And from what I know growing up with a lot of Mormon families, conforming to expected norms was very important to them. Not so much from a modest/immodest place, but rather not standing out too much or drawing attention to oneself. Perhaps with the statements of the stake president, it would be best to wear your kilts to secular events only.

That said, I think of my kilts as something you dress up or down in accordance to the occasion. You can wear them to the theater, art events, weddings at other churches, sporting events, evenings out, the kids soccer games, picnics, hiking, pretty much anywhere you want. At first it took me a while to get in the habit of throwing on a t-shirt and a pair of boots with my kilt. Really what i needed was a day sporran since my first sporran purchase was pretty formal. My point is when I first got my tank, I was so enamored of the whole dress look with the PC and ghillies that I forgot that I could wear the kilt pretty much anywhere. That day sporran kind of opened up my head to all the different ways you can wear a kilt. (You just may want to skip the kilt for home teaching!)

Good luck, I am sure there are lots of places you can enjoy your kilt once you put your mind to it.