The problem is occuring where cp2_newsfader.pl writes the newsfader text to the vars file. If you look at vars_news_fader, there are two carriage returns at the end of each line instead of one.
I'm not sure why it does this, but perhaps a patch like this might work:
In ubb_forum_summary.cgi, change
sub ReadNews {
my @news = split (/n/, $vars_news_fader{nftext});
my $chr = chr(13);
to
sub ReadNews {
my @news = split (/nn/, $vars_news_fader{nftext});
my $chr = chr(13);
I would try it myself, but I have since upgraded to 6.7. Any plans to port this to 6.7?