Found the category listing code. In /include/search.php, ~line 398, comment if else statement and replace with:
Code:
$where[] = "($sql_tbl[category_memberships].membershipid IS NULL OR $sql_tbl[category_memberships].membershipid = '2')";
$where[] = "($sql_tbl[product_memberships].membershipid IS NULL OR $sql_tbl[product_memberships].membershipid = '2')";
This is obviously only for the default wholesale membership but you get the idea.