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You have worked out how Smarty works, but you need to understand how XOOPS works too. I am afraid that the answer is not simple, but here goes...
An XOOPS block is defined in its module's xoops_version.php file. The block that uses the template you are modifying is defined like this:
$modversion['blocks'][1]['file'] = "news_topics.php";
$modversion['blocks'][1]['name'] = _MI_NEWS_BNAME1;
$modversion['blocks'][1]['description'] = "Shows news topics";
$modversion['blocks'][1]['show_func'] = "b_news_topics_show";
$modversion['blocks'][1]['template'] = 'news_block_topics.html';
When XOOPS has to display the block, it uses the above definition to include the file modules/news/blocks/news_topics.php, call the function b_news_topics_show() and fetch the template news_block_topics.html.
This means that in the template you are modifying, the smarty $block variable is set up by the code in the function b_news_topics_show() in the file news_topics.php. If you want to access different data (like the stories data you have copied from news_block_top.html) you have to make sure that this data is loaded into smarty by your PHP code. Again using xoops_version.php, you can see that the code you need is in news_top.php.
I hope this is enough to get you started...