Actually, I found a fix.
Instead of using “cat_name” you can use “category_nicename”. The nice name is the category slug. IE: Condos & Beach Houses -> condos-beach-houses
There seems to be no issue with length using the slug.
I have highlighted the change below with =================
<?php //get the current category and put into $category var
$category = get_the_category();
echo "<h2 class='headline'>".$category[0]->cat_name."</h2>";
//
//
// ==========================================
$cat = $category[0]->category_nicename;
// ==========================================
//
//
?>
<?php $recent = new WP_Query(); ?>
// for testing what the 'get_the_category()' output was
<?php echo "cat: ".$cat; ?>
// this was working for some categories but not others
<?php $recent->query('category_name='.$cat.'&showposts=-1'); ?>
<?php while($recent->have_posts()) : $recent->the_post(); ?>
<a href="<?php the_permalink(); ?>"><?php the_title(); ?></a><br />
<?php endwhile; ?>
Hope that helps someone