A similar situation happened at my university. About 15 or 20 years ago a local was absorbed by XYZ, an NPC org. A few years ago it was closed by XYZ nationals due to RMF and the sisters formed a new local group (different from the original local). It's still in existence today, 4 or 5 years later, and going strong. However, this time it is NOT recognized by the university and the office of greek life actively discourages students from joining. I think this is because it was disbanded because of some pretty serious risk management issues.

The women in the group today were never initiated into XYZ, but when XYZ recolonized recently they started fresh with a colonization from the ground up. I don't know that an NPC org would absorb the local given its history, and I'm pretty sure the local has zero interest in affiliating. Interesting situation.

The group that affiliated with Phi Mu at Penn State was a regional service sorority. They had three chapters at one time. I can't remember their name, but I think their symbol was a hot air balloon. Their colors were green, blue and white.

Was it Theta Kappa Pi?

Yes! It looks like they still have chapters at Lewis University and University of Charleston.