All the handlers defined in the handlers.xml will be invoked in the order of declaration. Try to use the debugger to see if it is invoking your handler.
I see what was happening, I placed my listener on the IDP, thinking that the handleStatusResponseType would get called when the response left the IDP, but prior to getting to the SP. By adding my listener to the SP, I see that I am indeed getting invoked.
Is it possible to add a filter on all outgoing messages, for message inspection?
At the SP, if you enable the trace logging on "org.picketlink", you should see trace information.
On the IDP side, there is the IDPSamlDebugValve that you can put in your context.xml to get some information on saml payload.