You're reading your input file one line at a time, and only printing a line when your regex matches - while what you say you want to print is a paragraph ("\n\n"-delimited areas of your input.) There are ways to make the above work - i.e., you could set a "keep printing" flag as soon as your regex matches and reset it when you hit whatever your end condition is - but since your input is already split into paragraphs, it's much easier to use Perl's EOL variable, $/, to tell your script to read it that way.

#!/usr/bin/perl
use strict;
use warnings;

my $pid = "10570";
my $str = 'cm_child\.c';

{
    local $/ = "\n\n";
    while (<DATA>){
        print if /^[DWEM]\s+.*?\s+(?:cm?|M):$pid\s+$str/sm;
    }
}

__END__
D Fri Nov 21 14:09:41 2008  TME_BILLING_COE  cm:10570  cm_child.c(107)
+:4385 1:blrdxp-santbs:CustomerCenter
        XXX CMAP: op_custom() past op_decode, opcode: PCM_OP_CUST
 D Fri Nov 21 14:09:41 2008  TME_BILLING_COE  cm:10570 cm_child.c :92 
+1:blrdxp-santbs:CustomerCenter:0:AWT-EventQueue-0:83:1227256900:0
        op_cust_validate_customer input flist
# number of field entries allocated 20, used 3
0 PIN_FLD_POID           POID [0] 0.0.0.1 /plan -1 0
0 PIN_FLD_ACCOUNT_OBJ    POID [0] 0.0.0.1 /account -1 0
0 PIN_FLD_PAYINFO       ARRAY [1] allocated 20, used 5
1     PIN_FLD_NAME            STR [0] "Invoice1"

D Fri Nov 21 14:09:41 2008  TME_BILLING_COE  cm:10570  fm_cust_pol_pre
+p_payinfo.c:113 1:blrdxp-santbs:CustomerCenter:0:AWT-EventQueue-0:83:
+1227256900:0
        op_cust_pol_prep_payinfo input flist
# number of field entries allocated 20, used 5
0 PIN_FLD_POID           POID [0] 0.0.0.1 /payinfo/invoice -1 0
0 PIN_FLD_ACCOUNT_OBJ    POID [0] 0.0.0.1 /account -1 0
0 PIN_FLD_FLAGS           INT [0] 1
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You also need to consider how you're going to deal with the metacharacters (such as '.') in the filename that you're using, since "cm_child.c" will happily match "cm_childXc" or "cm_child-c" when used as a part of the regex - but that's a different problem (one that can't be addressed since we don't know what the range of possible filenames is in your case.)