I think that you were on the right track to combine the fields. I'm not quite what you want to Group by and what you want to just Sort By, but I'm guessing that you want to Group by the Phase and then sort on the deliverable, but both in your desired sequence.
So make a new field called [TimeLine Phase] with the formula
List(" ", Right("00" & totext([Phase Sort Order]),3), [Phase Name])
so that should read like 003-Dev of Future Services in Contract
and then similar for the [Timeline Deliverable]
List(" ", Right("00" & totext([Deliverable Sort Order]),3), [Deliverable Name])
You should then be able to Group by [TimeLine Phase] and sort by [TimeLine Deliverable]