the only clue i have that this does not mean unfortunately necessary is that it is punctuated like a sentence, with an uppercase and a period. Is this right? and if i meant just the phrase, how would i write it as a stand alone statement?
Sajnos tends to be a word that expresses your opinion about the whole sentence or situation. It doesn't modify another word directly (like you're thinking of with "unfortunately necessary").
The related adjective sajnálatos ("regrettable" or "unfortunate") behaves more like a normal part of speech. And it has an adverb form sajnálatosan that could be used to make your phrase: sajnálatosan szükséges.