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I seem to have that problem as well. The recent news block just disappears if I try to change the default settings. I think i had this problem in earlier versions of News as well but for some reason it worked. But now I've updated the module to 1.44 and the problem has reoccured. The only way to make the block reappear for is to update the news module in the admin panel, which brings every news related block back to their default settings, so it doesn't help. I also upgraded to 2.0.13.2 and that didn't help either.
edit: i tried increasing the title length bit by bit and it seems to work... weird.
edit: i tried increasing the title length bit by bit and it seems to work... weird.