In SQL I can do this:
Select Coalesce(Property1, Property2, Property3, \'All Null\') as Value
From MyTable
If Property1, 2 and 3 are all n
Since you are binding to a String, null is a valid value for the PriorityBinding. I'm not sure what your Item class's property types are, but if you use Object, and set them to DependencyProperty.UnsetValue, you will get the behavior you are looking for.
The PriorityBinding documentation's remarks section describes how it works in more detail.