How to change link to a node's path in Views conditionally
You could add a blog_url field which you hide in a form alter and  programmatically set when the form is submitted. If the blog is remote, you set it to the value of the link field. If it's local, you set it to the value of the node. You can then use this field in Views (just include the Title field and use 'Link this field' to link it to the value of blog_url). Something along the lines of:

/**
 * Implements hook_form_alter().
 */
function mymodule_form_alter(&amp;$form, $form_state, $form_id) {
  if ($form_id == 'school_blog_node_form') {
    $form['field_blog_url']['#access'] = FALSE;
    $form['#validate'][] = 'mymodule_validate_school_blog_form';
  }
}

/**
 * Validate handler for school_blog edit form.
 */
function mymodule_validate_school_blog_form($form, &amp;$form_state) {
  if ($form_state['values']['field_blog_is_hosted'] == 'local') {
    $form_state['values']['field_blog_url'] = 'node/' . $form['nid'];
  }
  else {
    $form_state['values']['field_blog_url'] = $form_state['values']['field_blog_remote_url'];
  }
}