I am implementing News 2 on an existing Joomla 2.5 site (not mine) for a client, and the template seems to be removing the Read More links. If one of the default templates or the existing template is applied, the read more links reappear, but when the Gavick template is applied they disappear (settings are correct in Article options).
It's on a local server, unfortunately - but do you have any idea where to start looking for a clash? It's not being hidden in CSS or anything - the code isn't there. Latest patches of Joomla, GK and everything else as far as I can see.