I answered this question on my own in a complicated way. I am still waiting on other forums for an easier answer but I might as well post my solution here.
The issue is that the event loaders didn't actually load the scripts when you activate the item. The items are built to run on the x2_mod_def_act event which is not present in the original campaign.
To fix this I changed the module properties of each original campaign module to include a custom script that calls both the normal even loader for that module and "x2 mod def" scripts.
Here is the following process that I used.
Step 1: Edit your nwnplayer.ini with the following entries under the "Game Options" category. This will open all modules for editing in the NwN tooleset:
Step 2: Open the toolset and then open the Campaign Modules option. The area we want is the "Edit > Module Properties > Events" menu. Listed are the two main features required to load this mod. Take note of what is listed in each. Image here:
Step 3: If nothing is listed in either of those slots then you can fill them with the respective mod label
x2_mod_def_act for OnActivateItem
x2_mod_def_load for OnModuleLoad
Step 4: If something is already listed in those slots, such as m3q1modactivat, then you will need to load both the x2 script and the campaign script. To do this you will need to create a custom script. Right click on the scripts tree in the module and select "New". The new entry will need to call both event loaders with the ExecuteScript commands. Here is a sample:
Step 5: Save the module edits that you made and you should be able to play through the original campaign with the the rod. To spawn it you will need to use the commands from the console (tilde key):
This needs to be done for each campaign chapter, unfortunately. It's about 10 minutes of work. There is probably a much easier solution. This also opens the door to conflicts to other mods that use the same loader as it will call them twice. It's dirty, but it works.