Yeah particles does seem like the way to go. I just found out one of the engineers made a Sprite component actor which is placeable in the editor which is basically the same as placing a single frozen particle and it's dirt cheap.
The main thing I was avoiding was placing 100 or more of these buggers on a tree or bush and having to make a prefab every time instead of controlling the placement of the poly-faces in maya. But if that's what I gotta do... ehh.
Our current rays are using pretty much the exact setup you described. The particular effect I was trying to achieve was a sort of layering or "dancing" of the light rays as you walk around them and I was curious to see what would happen if I used the sprite and constrained its rotation to an axis. I'm getting an "ok" look with a panner on our current cylindrical ray.
Also we are trying to get a single light ray attach to our bullet decals so when we are penetrating a thin surface a light ray will appear on the internal normal but that's definitely going into the particle system and might need code support to create specific inside/outside volumes.
So, you've convinced me to use the particle hack and proceed from there, thanks a lot for the help I didn't expect a response to this so damn fast!
I'll post my results if it doesn't break my NDA.