I'm not sure how this has been 'Solved'. 

There could be an argument made that the proceeds are liken to Unemployment income, which is not subject to SE tax. 

For grants that are subject to tax and reported on a 1099G, the instructions do not talk about entering the proceeds as Gross Revenue, so what's to stop anyone from reporting as other income (not subject to SE tax). 

Honestly, I'm looking for the Code, specifically - interpretations (such as mine) are great but not super helpful.