I really liked your design idea and the idea of "condensing" the news section to take up less space. Here is my version:
http://www.modernengineuity.com. I had to do it a little differently as I have an image for each post (which I make indidividually). I allow members to post in this section also so I had to store the thumbnails in the database so posts without them would be recognized and displayed correctly.
Thanks for the inspiration.