Your fix caused the stuff after newlines to get lost so I tried to fix the fix.

In the first attempt I tried to replace the code on lines 1731-1733 by

$t->{twig_chunk_number} = 0 if !defined($elt->{cdata});
        $elt->{cdata}.=  $t->{twig_stored_spaces}.$string
          unless( $t->{twig_keep_encoding} && defined($elt->{cdata}) &
+& length($elt->{cdata})>1024 && ++$t->{twig_chunk_number}==1) ; # fix
+es a bug in XML::Parser for long CDATA
[download]

This helped somewhat, the script in the root node went fine, the text was complete. The problem was that as soon as I copied the long line another time within the tag, the original problem reappeared. The last several characters of the second line appeared twice.

I'll try something more, but I think the place this should be fixed is XML::Parser, not XML::Twig.

UPDATE: Looks like this works. You'll probably want to tweak it to fit better into the module:

        $elt->{cdata}.=  $t->{twig_stored_spaces}.$string
          unless $t->{twig_skip_next_chunk}; # fixes a bug in XML::Par
+ser for long CDATA

        if ( $t->{twig_keep_encoding} && defined($string) && length($s
+tring)>1024) {
          $t->{twig_skip_next_chunk} = 1;
        } else {
          $t->{twig_skip_next_chunk} = 0;
        }
[download]

Looks to me like we need to remember whether the last chunk was larger than 1024.

All tests that ran on my computer passed.