Posting in case someone else may find this useful. You're quite right to state in your 'Known issues' section that the Wordpress Newsletter plugin breaks the Featured Content Gallery/Dynamic Content Gallery Widget due to a Javascript conflict.
You suggest your own alternative, which I'm sure would do the job well, but, as the fdcg widget is hardwired into the Genesis framework that we use with WP, the thought of changing it was not a pleasant one.
Turns out there's a 'fix'. Go to 'Dynamic Content Gallery Configuration' from your WP dashboard, then select the 'Javascript Options' tab, then change the Javascript framework option from Mootools (the default) to jQuery, and everything works again. Well, it did for us.
I found that I needed to play with the 'Slide Pane Opacity' setting a bit, but that aside, painless.
Cheers, Mat