Come convertire un'ora DATEPART che è l'ora militare per mezzanotte (00) in un valore che posso utilizzare quando ne ho bisogno per un calcolo?

Se non mi manca nulla, questo è quello che potresti provare al posto del tuo loop:

DECLARE
  @StartTime time,
  @EndTime   time;

SET @StartTime = '22:30:00';
SET @EndTime   = '00:52:00';

WITH timerange AS (
  SELECT
    StartTime = CAST(@StartTime AS datetime),
    EndTime   = DATEADD(
      DAY,
      CASE WHEN @StartTime > @EndTime THEN 1 ELSE 0 END,
      CAST(@EndTime AS datetime)
    )
),
hourly AS (
  SELECT
    n.number,
    t.StartTime,
    t.EndTime,
    HStart = DATEADD(HOUR, DATEDIFF(HOUR, 0, t.StartTime) + n.number    , 0),
    HEnd   = DATEADD(HOUR, DATEDIFF(HOUR, 0, t.StartTime) + n.number + 1, 0)
  FROM timerange t
    INNER JOIN master..spt_values n
      ON n.number BETWEEN 0 AND DATEDIFF(HOUR, t.StartTime, t.EndTime)
  WHERE n.type = 'P'
),
hourly2 AS (
  SELECT
    number,
    HStart = CASE WHEN StartTime > HStart THEN StartTime ELSE HStart END,
    HEnd   = CASE WHEN EndTime   < HEnd   THEN EndTime   ELSE HEnd   END
  FROM hourly
)
SELECT
  StartHour   = DATEPART(HOUR  , HStart),
  StartMinute = DATEPART(MINUTE, HStart),
  EndHour     = DATEPART(HOUR  , HEnd  ),
  EndMinute   = DATEPART(MINUTE, HEnd  ),
  StartTime   = CAST(HStart AS time),
  EndTime     = CAST(HEnd   AS time)
FROM hourly2
ORDER BY number
;

L'output prodotto è questo:

StartHour   StartMinute EndHour     EndMinute   StartTime        EndTime
----------- ----------- ----------- ----------- ---------------- ----------------
22          30          23          0           22:30:00.0000000 23:00:00.0000000
23          0           0           0           23:00:00.0000000 00:00:00.0000000
0           0           0           52          00:00:00.0000000 00:52:00.0000000