Dude,
Thanks for your attention. We continue to work this. More testing and search for work different solutions today. We will share it here should it help others.
We were mislead a bit by the fact that 20-10 has one menu system and Newscast has two menu systems. If readers of this thread go to the start you can see the odd situation where we had 250+ menu selections. One day a tech here moved one and we lost all but 90 in each menu bar. Menu1 had 90, Menu 2 had 90. Trying to add a menu, if you saved it would not add the menu. If you added a menu and put it higher in the menu system the last menu would be deleted. For us the 90 limit was hard. Research has found for others this can be as low as 16, bit more often the limit is between 60 and 90.
Checking again, 20-10 only would allow 90 (it was a different menu set than Newscast was allowing) it just jumbled up the 90 menu items it allowed looking like it supported more. When we counted it came to 90.
We bought and installed another authors (modern, 2 days old ver. 1.0) to see if it would help. We had to rebuild the menu system (we moved this to another part of the shared server we are on for development) when we hit 91 it would not take it. That took us back to our research.
http://core.trac.wordpress.org/ticket/14134
In the wordpress development trac we found this is a known (but clearly not published well) problem. Depending on the host, if they have it set up for security and performance issues to limit the number of functions you are stuck. So if you can not get them to increase the suhosin variable you can not get any more than the limit they have set.
Some users have been able to add "php_value max_input_vars 2000" to the .htaccess file. In my case that did not work it just created a server error. I expect my host has restricted that.
Interesting, Newscast actually allows us to double the number of menu items. Since we can have 90 in each menu we get 180! The only reason I can come up with for getting up to 250+- is our tech was setting up menu's and never did a save till the end. Then months later when she moved one it had to process all the menus on save and invoked the limit. But without further testing a guess on our part.
It appears this is not a limit to the menus, it is a limit to how many you can save at once. The menu system is rather clunky, ok for a few menu's but not a complex system.
The attitude on the trac is positive and wanting to help. However, some argue that you should never need this many menu's. I remember a bug I found in 1989 on disk drives. The software we were running would not work on a drive larger than 40meg (yes that is not a typo they were that small.) The developer told me when they developed the software they never thought a drive any bigger would be made, that was the reason for the limit.
So while people may not be using many menu items today, they will in the future. More and more WP is being used as Content Management system. they will need to fix this problem in the future.
Some trac contributors indicate the group is small that is having this problem, so it need not be fixed. They are right the group is small since not many look to have so many menu items. Still WP was based on simple good clean code (we started with ver. 1.2) they need clean menu code.
I am going to continue our testing and provide all that data on the trac with the hopes that it helps to update the menu system on the backend of WordPress.
We are also trying some plugins and hacks to split up the menus so our server can swallow them when we save them.
More to come,
Steve
P.S. I felt bad buying a theme from someone else, we love Newscast and the support here has always been very good. It did help with our testing so was worth the money.
Create a new thread and tell me what problems you are encountering and what you want to know. 
There is no step 3 :) 
