I was having a similar problem (although with signing rather than encrypt/decrypt). Crypt::GPG is a little naughty within sub sign() around line 74 I have:

  my $message = join ('', @_);
  $message .= "\n" unless $message =~ /\n$/s;
  $message =~ s/\n/\r\n/sg;
  print $tmpfh $message; close $tmpfh;
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This is incredibly bad behaviour that the module modifies $message prior to passing to GPG. As we don't get $message passed back undoubtedly the copy you're using is different to the one the module passes to GPG.

Upon me commenting out those two regexes sign() now actually works for me!

The above perhaps may not be helpful seeing you're using encrypt() and decrypt(), but I thought I'd post it anyway..

It looks like this particular problem could have been resolved in module revision 1.57